Toronto stocks closed higher on Friday, helped by "the regular culprits" in the energy and mining sectors, with an added boost from Inco Ltd's withdrawal from the fight for Falconbridge. The Toronto Stock Exchange S&P/TSX composite index closed up 64.77 points, or 0.55 percent, at 11,823.68.
"The regular culprits here are running the show - all of the energy stocks and minerals, base-metals, precious metals, are having good days today," said John Kinsey, a portfolio manager with Caldwell Securities Ltd.
"It's sort of a continuation of the rally that was going on early in the week until we ran into a bit of profit-taking." The TSX had advanced 460 points the first three days of the week until falling 100 points on Thursday. Overall, nine of the TSX index's 10 main groups ended higher on Friday. The only loser was consumer staples.
The materials subgroup closed up 1.85 percent, with gold issues ahead 2.93 percent as gold futures firmed 0.4 percent. Barrick Gold rose 87 Canadian cents, or 2.6 percent, to C$34.52. Goldcorp gained 92 Canadian cents, or 2.87 percent, to C$32.97.
The base-metal mining subindex closed up 1.26 percent as Inco conceded defeat in its take-over bid for Falconbridge. Inco shares jumped C$2.56, or 3.05 percent, to C$86.57, as it may now become the focus of a take-over battle.
Falconbridge, the most actively traded stock with a volume of more than 45 million shares, ended just 5 Canadian cents higher at C$62.23. Teck Cominco Ltd, which has a C$17.8 billion hostile bid for Inco, ended down 24 Canadian cents, or 0.33 percent, at C$73.01.
"Other than having a lot of disappointed Falconbridge shareholders it's just more of the same - people liked the earnings, people liked the potentials of mergers and take-overs," said Kinsey. The energy group, which makes up about 30 percent of the main TSX index, closed 0.28 percent higher even though oil futures dropped $1.30 to $73.24 a barrel.
Nexen Inc added C$1.34, or 2 percent, to C$66.00. EnCana Corp rose 96 Canadian cents, or 1.6 percent, to C$60.96. "I sense a disconnect between the energy stocks and the price of oil coming down," said Mario Richard, senior portfolio strategist at Sceptre Investment Counsel.
"The energy stocks have never discounted $73 a barrel to start with, so there might be a bit of a positive surprise to see how strong the earnings are," Richard said
"They're exceeding expectations in a lot of cases and even if the price of oil is down a buck and a quarter or a buck and a half, a lot of these companies are discounting $58 to $60 a barrel at this stage, and so I think there's a belief that the energy sector remains fairly decent value and that's probably why they are not acting too badly to the oil move here."
Market volume was a healthy 265.5 million shares worth C$7.26 billion. Advancers outpaced decliners 889 to 558. The blue chip S&P/TSX 60 index closed 3.99 points higher, or 0.6 percent, at 669.57.
For the week, the TSX rose 1.7 percent, with the main index up 4.89 percent so far this year. "We're hoping for a good day Monday so we get a good close to the month. Because we've had some pretty stinky monthly closings, in May and June," said Kinsey.
US stocks surged as the drop in oil prices eased concerns over corporate energy costs and while GDP data showing slower economic growth quelled fears of further interest-rate hikes.
The Dow Jones industrial average climbed 119.27 points, or 1.07 percent, to 11,219.70. The Nasdaq composite index gained 39.67 points, or 1.93 percent, to 2,094.14.
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