Jan. 12 (Bloomberg) -- Canadian stocks advanced, led by banks and metals producers, as borrowing costs declined in bond sales in Spain and Italy and the U.S. dollar weakened.
Toronto-Dominion Bank, Canada’s second-largest lender by assets, rose 0.9 percent as the S&P/TSX Financials Index gained for a fourth day. Enbridge Inc., the country’s biggest pipeline company, fell 2.1 percent as natural gas headed toward its biggest weekly loss since August 2009. Goldcorp Inc., the world’s second-largest gold producer by market value, increased 1.5 percent as the metal climbed for a third day.
The Standard & Poor’s/TSX Composite Index rose 13.38 points, or 0.1 percent, to 12,274.32.
“People are a bit more comfortable with the euro, so it’s a risk-on trade,” Brian Huen, a managing partner at Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$55 million ($54 million). “You saw gold lose its safe-haven status at the end of the year. It was a flight to safety to the U.S. currency.”
The index has rallied 6.4 percent since Dec. 19 as economic data indicating a strengthening U.S. economy outweighed the impact of the European debt crisis. The S&P/TSX fell nine of the 10 months ending in December as concern that the crisis would limit global economic growth weakened shares of commodity producers.
Spain sold 10 billion euros ($13 billion) in bonds today, twice its target. Italy sold 12 billion euros in bills at less than half the yield paid on similar-maturity securities on Dec. 12. The euro gained, and the U.S. Dollar Index fell after closing at the highest level since September 2010 yesterday.
The eight S&P/TSX banks each gained. TD advanced 0.9 percent to C$77.70. Bank of Nova Scotia, Canada’s third-biggest lender by assets, increased 1.1 percent to C$52.20. Manulife Financial Corp., North American’s fourth-largest insurer, climbed for a record 10th-straight day, rising 1.1 percent to C$11.89.
The S&P/TSX Energy Index dropped as natural gas futures declined for a fourth day. The fuel has tumbled as much of North America has had a milder winter than normal. Crude retreated after a European Union official with knowledge of the matter said an embargo on Iranian oil is likely to be delayed for six months.
Enbridge fell 2.1 percent to C$36.04. Encana Corp., the country’s largest natural gas producer, declined 2.2 percent to C$18.20, the lowest close since January 2005. Trilogy Energy Corp., which produces the fuel in Canada, slumped 7.6 percent to C$30.40 to extend its two-day plunge to 16 percent, the most since October 2008.
The S&P/TSX Materials Index gained as precious and base metals advanced. Goldcorp increased 1.5 percent to C$46.78. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, climbed 4 percent to C$23.30. Cameco Corp., the world’s biggest uranium producer, rallied 5.3 percent to C$20.67.
Guyana Goldfields Inc., which explores in South America, plunged 11 percent, the most in two years, to C$7.40 after delaying the release of a feasibility study on its Aurora project.
Quest Rare Minerals Ltd., which explores for rare earths in Canada, soared 26 percent, the most since August 2009, to C$3.27 after reporting drilling results from its Strange Lake project in Quebec.
BlackBerry maker Research In Motion Ltd. rose 5.5 percent to C$16.80. The shares gained on speculation the company hired Goldman Sachs Group Inc. to explore strategic options, Reuters reported, citing a trader it didn’t name.
Bombardier Inc., the maker of trains and airplanes, rallied 6.9 percent to C$4.52. The company is to participate in the Bahrain International Airshow next week.
--Editors: Stephen Kleege, Joanna Ossinger
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