Bloomberg News

Canadian Stocks Advance After Fed Notes Labor Improvement

March 13, 2012

Canadian stocks rose for the fourth time in five days, led by copper producers and financials, after the U.S. Federal Reserve left policy unchanged, citing an improving labor market, and U.S. retail sales met forecasts.

Denison Mines Corp. (DML), the operator of three U.S. uranium mines, gained 11 percent after China Daily quoted an official as saying the country plans to increase imports of the nuclear fuel this year and buy uranium mines in Canada. Manulife Financial Corp. (MFC), North America’s third-largest insurer, rose 3.1 percent on the retail sales report. Teck Resources Ltd. (TCK/B), Canada’s biggest base-metals producer, rose 2.9 percent as copper climbed to the highest price in a week on prospects of improved demand from the U.S.

The S&P/TSX Composite Index (SPTSX) rose 109.68 points, or 0.9 percent, to 12,537.69 in Toronto. The index extended gains in afternoon trading after Federal Reserve policy makers led by Chairman Ben Bernanke raised their assessment of the economy and refrained from new actions to lower borrowing costs.

“I would say the announcement is neutral,”Danielle Park, a money manager at Venable Park Investment Counsel Inc. in Barrie, Ontario, said in a telephone interview. The firm manages at least C$1 million ($1 million) each for more than 200 clients. “Stocks rallied this morning supposedly on hope for some message, but I wouldn’t say he delivered it. He’s saying that global market stresses have eased and that higher oil is going to push up inflation temporarily. That would suggest to me that he would be on hold for QE.”

Market Recovers

The index has increased 1.9 percent since March 6, the day of its largest decline of the year, as stronger-than-forecast American jobs data and Greece’s debt restructuring helped offset China’s lower growth target and Europe’s economic contraction. Energy and raw-materials companies make up 46 percent of Canadian stocks by market value, according to Bloomberg data.

Equities advanced today after Commerce Department data showed U.S. retail sales rose 1.1 percent in February, matching the median forecast of 81 economists surveyed by Bloomberg News. Sales rose in 11 of 13 categories, including auto dealers and clothing stores, showing gains in demand were broad based.

Copper stocks in the S&P/TSX rose on the retail sales data. First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, increased 3.3 percent to C$21.13. Teck rose 2.9 percent to C$36.53.

Denison Mines surged 11 percent to C$1.66.

Uranium Importer

China plans to import more uranium this year than last, Qian Zhiming, the deputy director of China’s National Energy Administration, told China Daily. The country imported 16,126 tons of uranium in 2011, the newspaper said, citing customs data. China aims to buy overseas uranium mines, particularly those in Canada, Qian was quoted as saying.

Financial companies in the index increased for a fourth day. Royal Bank of Canada (RY), the country’s largest lender by assets, advanced 2.2 percent to C$58. Toronto-Dominion Bank (TD), Canada’s second-largest lender, rose 1.2 percent to C$83.30.

Manulife climbed 3.1 percent to C$12.65.

Gold fell to its lowest price since January after the Fed signaled that monetary stimulus wouldn’t be expanded. Barrick Gold Corp., the world’s largest producer of the metal, fell 0.8 percent to C$44.92. Goldcorp Inc., the second-largest producer in the world by market value, decreased 1.5 percent to C$45.52.

Kinross Gold Corp., Canada’s third-largest producer of the metal, decreased 4 percent to C$10.40, the largest drop since Jan. 17. The company is facing a C$4 billion lawsuit related to its Tasiast mine in Mauritania, the second such suit filed in less than a month, according to the National Post. Kinross recorded a $2.49 billion goodwill writedown on the Tasiast mine in the third quarter.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net


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