Canadian stocks rose the most in seven weeks as technology and consumer shares gained after better-than-expected U.S. data offset a World Bank forecast for slower growth in China.
Empire Co. (EMP/A) soared 11 percent after a unit agreed to buy Safeway Inc.’s Canadian assets in a $5.7 billion deal. BlackBerry added 5.8 percent after Societe Generale SA advised clients to buy the stock. Lundin Mining (LUN) Corp. jumped 8.8 percent after agreeing to buy a nickel mine from Rio Tinto Group. Kirkland Lake Gold Inc. lost 1.9 percent as the precious metal’s price dropped.
The Standard & Poor’s/TSX Composite Index (SPTSX) rose 167.24 points, or 1.4 percent, to 12,277.13 at 4 p.m, the biggest advance since April 24. The gauge snapped a two-day losing streak that had erased 2.2 percent. Trading volume was 11 percent lower than the 30-day average.
“When you look at the World Bank reducing GDP estimates, that was more related to the emerging markets and Europe,” said Anish Chopra, a fund manager with TD Asset Management Ltd. in Toronto. He helps manage C$204 billion ($201 billion). “The data in North America, whether in Canada or the U.S. with retail sales above forecast and jobless claims decreasing, that’s all positive. And when you put the two together that’s positive for North America, which is why you’re getting the reaction you’re seeing.”
Data today showed retail sales in the U.S. rose 0.6 percent last month, surpassing the median forecast of 0.4 percent in a Bloomberg survey. A separate report indicated fewer Americans than forecast filed applications for unemployment benefits last week. U.S equities rallied, with the S&P 500 gaining 1.5 percent.
Data from Statistics Canada showed industrial companies’ use of production capacity rose in the first quarter, as oil and gas companies boosted output.
Global equities slumped after the World Bank said in a report released yesterday that the world economy will expand 2.2 percent this year, less than a January forecast for 2.4 percent growth.
The growth forecast for China, Canada’s second-largest trading partner, was cut to 7.7 percent from 8.4 percent, the bank said. China is the world’s biggest consumer of industrial metals and energy.
All 10 industries in the S&P/TSX rose, with technology stocks adding 3 percent and producers of consumer staples gaining 2.3 percent.
BlackBerry, formerly Research In Motion Ltd., climbed 5.8 percent to C$14.68. Andy Perkins, an analyst with Societe Generale, raised his rating for the stock to buy from sell.
Sales of BlackBerry’s latest smartphones are doing well, with the touchscreen Z10 estimated to sell 4 million units and the Q10, which boasts a physical keyboard, to sell just under 1 million units.
Empire soared 11 percent to a record C$74.77. Its Sobeys Inc. will have 213 grocery stores in Western Canada and 199 in-store pharmacies in a bid to compete with Loblaw Cos., the largest grocery retailer in Canada. Loblaw added 3.9 percent to C$48.29.
Lundin Mining jumped 8.8 percent to C$4.33 after agreeing to buy Rio Tinto’s Eagle nickel and copper project in northern Michigan for about $325 million. Construction at the mine is just over 50 percent complete and output is scheduled to start in the fourth quarter of 2014, Lundin said in a statement.
Alacer Gold Corp. soared 12 percent to C$2.60 after Chief Executive Officer David Quinlivan said in an interview with Bloomberg the company plans to sell its two mines in Australia within eight months due to high labor costs.
Dorel Industries Inc. (DII/B) slumped 8.7 percent to C$35.40, the biggest drop in 13 months. The Montreal-based maker of bicycles and car seats said bad weather and widespread discounting hurt its second-quarter expectations for earnings in its cycling unit. Full-year earnings from that business will not exceed 2012 levels, and Dorel is cutting 50 jobs as a result.
Barrick Gold (ABX) Corp., the world’s largest gold producer, slipped 0.8 percent to C$20.02 and Kirkland Lake Gold retreated 1.9 percent to C$5.05. Gold futures for August delivery declined 1 percent to settle at $1,377.80 an ounce in New York.
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