CANADA STOCKS-TSX rallies on signs of euro-zone action
Toronto’s main stock index
rose for a third straight session on Thursday as co-ordinated
action to boost liquidity in the strained European banking
sector raised hopes that the euro zone debt crisis would be
defused as a threat to global economic recovery. The European Central Bank, the U.S. Federal Reserve and
other central banks said they would increase U.S. dollar
funding for banks was cautiously welcomed as a sign that
authorities were making a concerted effort to resolve Europe’s
debt crisis after weeks of market turmoil. juicy couture “On its own, this is just another headline to trade off
of,” said John Johnston, chief strategist at Davis-Rea Ltd.
“But it’s a sign that (policymakers) are being galvanized …
It’s a step in the right direction, and a sign that there’s
more steps to come.” The announcement boosted European bank shares and cut risk
aversion across global markets. Toronto’s heavyweight financial
sector, which had fallen in sympathy with battered European
banks lately, led the rally on the TSX, rising 2.3 percent. Royal Bank of Canada (RY.TO) jumped 3.2 percent to C$47.47,
Toronto-Dominion Bank (TD.TO) rose 2.5 percent to C$75.17, and
Manulife Financial (MFC.TO) surged 6.3 percent to C$12.91. Energy shares were also lifted by the upbeat mood, gaining
1.8 percent as oil prices climbed. Canadian Natural Resources
(CNQ.TO) rose 2.2 percent to C$35.22, while Cenovus Energy
(CVE.TO) advanced 3.3 percent to C$34.10. [O/R] The Toronto Stock Exchange’s S&P/TSX composite index
.GSPTSE ended the session up 131.46 points, or 1.07 percent,
at 12,424.84. Nine of its 10 main groups gained. In the past three sessions the TSX has rebounded almost 2.3
percent, but analysts warned the gains could be short-lived. “There is an improvement in sentiment here but it wont take
much to smack it down again,” said Johnston. “Ultimately we need to see some kind of concerted action
(in Europe) like we saw with the big central bank rate cuts and
the troubled asset relief program in the U.S … Until we see
that, I think we want to view these things as short-term
rallies within a declining market.” On the downside, the TSX’s heavyweight materials group sank
0.7 percent, dragged down by retreating precious metal miners
as gold prices slipped below $1,800 an ounce. [GOL/]
[ID:nL5E7KF1A4] Goldcorp Inc (G.TO) dropped 1.07 percent to C$49.83 and
Agnico Eagle (AEM.TO) eased 2.6 percent to C$66.85. “There’s a certain amount of frustration among investors
… Gold stocks seemed to lag on the way up, and on the way
down they tend to fall down faster than the price of gold,”
said Elvis Picardo, strategist and vice-president of research
at Global Securities in Vancouver. But he said there was still
an upside in gold stocks. “If you look at the trend for so many years now, every
significant retracement in gold has been met with buying at
some point. So if it falls much further we would expect
sustained buying to come in once again.” In individual company news, Research in Motion (RIM.TO)
fell 0.3 percent to C$29.40 ahead of its quarterly results,
which were reported after market close. The BlackBerry maker reported a sharp drop in quarterly
profit, hurt by an aging lineup of smartphones that was only
refreshed very late in the quarter and tepid sales of its
PlayBook tablet computer. Embattled miner Silvercorp (SVM.TO), caught in a maelstrom
of anonymous fraud allegations, said on Thursday its shares are
undervalued and it is pushing ahead with its buyback plan. Its
stock rose 7.3 percent to C$6.90.
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