TSX higher amid rising commodity prices
A Toronto Stock Exchange ticker is seen at The Exchange Tower in Toronto on August 18 2011. THE CANADIAN PRESS/Aaron Vincent Elkaim
TORONTO - The Toronto stock market headed higher Monday amid reassuring words on stimulus from the chairman of the U.S. Federal Reserve and positive news from Europe.
The S&P/TSX composite index gained 64.23 points to 12,529.89 with gains spread across most sectors. The TSX Venture Exchange gained 24.61 points to 1,580.13.
The Canadian dollar was up 0.72 of a cent to 100.85 cents US.
U.S. markets registered a solid gain and the greenback lost ground after Bernanke said the U.S. job market remains weak despite three months of strong hiring and that the Federal Reserve’s existing policies will help boost growth.
Bernanke’s comments were a strong indication that the central bank is prepared to keep its low-interest rate policies in place for some time to come despite the recent signs of economic growth.
"He’s still prepared to stand ready to provide support for the economy," said John Johnston, chief strategist Davis Rea Ltd.
"He won’t do anything to limit the upside for the economy but he is certainly there to limit the downside."
The Dow Jones industrial index jumped 125.94 points to 13,206.67.
The Nasdaq composite index was 34.8 points higher to 3,102.72 and the S&P 500 index was up 13.44 points to 1,410.55.
Market sentiment also got a lift after a closely watched survey shows that German business confidence rose for the fifth month in a row. The Ifo Institute said its main confidence index rose to 109.8 points from 109.6 in February.
Both the current assessment and expectations components topped estimates.
Germany’s economy has been traditionally powered by exports but helped lately by increasingly strong domestic demand. Europe's largest economy has been a bright spot over the past couple of years.
Also, German chancellor Angela Merkel said her country may be willing to temporarily increase the eurozone’s bailout funds to €700 billion.
The 17-country eurozone is under pressure to raise its financial firewalls to boost confidence in struggling countries like Italy and Spain.
The industrials group led Toronto advancers with Canadian National Railways (TSX:CNR) ahead $1.72 to $79.78 and Canadian Pacific Railway (TSX:CP) advanced 99 cents to $78.31.
The gold sector was up 0.85 per cent as bullion prices also moved higher with the April contract up $23 to US$1,685.40 an ounce. Goldcorp Inc. (TSX:G) was ahead 59 cents to $45.19.
Other commodity sectors were weaker with oil prices up slightly as investors weighed concerns over global economic growth against possible disruptions in crude supplies due to an international standoff over Iran’s nuclear program.
The May crude contract on the New York Mercantile Exchange edged up 18 cents to US$107.05 a barrel, taking the energy sector up 0.35 per cent. Suncor Energy (TSX:SU) climbed 19 cents to C$32.99.
The base metals sector rose 0.12 per cent while copper prices were up seven cents to US$3.88 a pound on the Nymex. Prices for the metal fell last week after HSBC's Chinese manufacturing index went deeper into contraction during March. Copper prices were also under pressure amid soft Chinese housing data and a warning from miner BHP Billiton.
China is the world's biggest consumer of copper, viewed as an economic bellwether as it is used in so many industries. China itself has been a major prop for a fragile global economic recovery.
Teck Resources (TSX:TCK.B) rose 35 cents to C$35.49.
The financials sector ticked ahead 0.6 per cent as Scotiabank (TSX:BNS) advanced 40 cents to $56.60.
The telecom sector also provided lift with Telus Corp. (TSX:T) ahead 51 cents to $57.99.
SNC-Lavalin (TSX:SNC) was also in focus after the engineering firm's chief executive officer resigned. Pierre Duhaime’s departure comes after an internal investigation revealed he signed off on $56 million US of questionable payments, a move which breached the company’s code of ethics.
SNC said the company’s CFO and chairman refused to approve the payments, but Duhaime stepped in to allow the payments to be made.
SNC also reported Monday that net income attributable to shareholders dropped 52 per cent to $76 million in the fourth quarter, or 50 cents a share, compared to net income of $158.7 million, or $1.04 cents per share, in the same period a year earlier. Its shares shed early losses and rose 55 cents to $39.82.
In other corporate news, Crown Point Ventures Ltd. (TSXV:CWV) said Monday it has acquired the Argentine subsidiary of Antrim Energy Inc. for $46.4 million, increasing its oil and gas assets in Argentina. The main assets of Antrim Argentina are three oil and gas producing concessions in the Tierra del Fuego portion of the Argentine Austral basin and a 50.1 per cent interest in the Cerro de Los Leones exploration concession. Crown Point shares were unchanged at $1.12.
European bourses were positive with London's FTSE 100 index up 0.88 per cent, Frankfurt's DAX gained 1.31 per cent and the Paris CAC 40 advanced 0.59 per cent.
Earlier in Asia, Japan’s Nikkei 225 index rose less than 0.1 per cent, Hong Kong’s Hang Seng Index finished unchanged.
Mainland Chinese shares were flat too as the benchmark Shanghai Composite Index was less then 0.1 per cent higher while the smaller Shenzhen Composite Index was unchanged.
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