TSX rise amid Chinese growth data
TORONTO - The Toronto stock market advanced Wednesday amid signs that economic growth in China held up better than expected during the first quarter.
The S&P/TSX composite index climbed 74.54 points to 14,378.46 after the world’s second-largest economy grew 7.4 per cent from a year earlier in the January-March quarter, down from the previous quarter’s 7.7 per cent. It was the weakest growth in China since the 2008-09 global crisis "but the main economic number wasn't as bad as some feared," observed BMO Capital Markets senior economist Jennifer Lee.
"China's economy is taking a breather but this is fully expected," Lee said.
The Canadian dollar was down 0.21 of a cent to 90.89 cents US after the Bank of Canada said it was keeping its key rate unchanged at one per cent. The bank also lowered its forecast for first quarter growth this year to 1.5 per cent, from 2.5 per cent, but attributed the downgrade mostly to temporary impacts of a unusually severe winter.
There was also a major acquisition in the gold sector that will see Yamana Gold Inc. (TSX:YRI) and Agnico Eagle Mines (TSX:AEM) jointly acquire 100 per cent of Osisko Mining (TSX:OSK) in a cash and stock deal worth $3.9 billion. The companies are paying Osisko $8.15 a share. The offer represents an 11 per cent premium to a hostile bid for Osisko that had been mounted by Goldcorp (TSX:G). Yamana shares dipped 27 cents to $8.91, Agnico Eagle dropped $1.83 to $31.62, Goldcorp rose 22 cents to $26.22 while Osisko shares were up 47 cents to $7.90.
New York's Dow Jones industrials ran ahead 87.57 points to 16,350.13, the Nasdaq composite index gained 20.72 points to 4,054.88 and the S&P index points climbed 7.7 points to 1,850.68.
There was also a heavy slate of mixed earnings news to consider.
On Wednesday, supermarket chain Metro Inc. (TSX:MRU) posted $96.9 million in quarterly net earnings, down 73.3 per cent from the same quarter of 2013 when results included an unusual gain from the sale of Metro’s investment in convenience store chain Alimentation Couche-Tard as (TSX:ATD.B). Adjusted earnings were $1.07 per share, up from 98 cents per share last year and five cents higher than analysts had expected. Overall sales were up 1.7 per cent year-year, rising to $2.55 billion from $2.51 billion and Metro shares were up $1.92 or three per cent to $66.20.
In the U.S., chip giant Intel posted earnings per share of 38 cents, a penny more than expectations. Revenue grew to US$12.8 billion from $12.6 billion, narrowly missing expectations of $12.81 billion and its edged up 16 cents to US$26.93.
And Yahoo’s earnings per share ex-items were 38 cents, a penny higher than analyst forecasts and its shares jumped $2.36 or 7.7 per cent to $36.57. Net earnings were US$312 million, or 29 cents per share compared with $390 million or 35 cents per share a year earlier.
Prices for oil and metals rose in the wake of the Chinese economic data and the energy sector rose 0.8 per cent, while May crude contract on the New York Mercantile Exchange gained 82 cents to US$104.57 a barrel.
The TSX base metals component was up 0.5 per cent as the May copper contract rose five cents to US$3.04 a pound.
The gold sector was the only TSX decliner, down 0.55 per cent while June bullion inched up 20 cents to US$1,300.50 an ounce.