TSX higher on day, surges 4.3pc on week

TORONTO : Toronto 's main stock index ended more than 1 percent higher on Friday, as hopes for a resolution to the euro

The energy sector saw the largest surge, as Brent crude oil futures posted their highest close since Sept. 15, the biggest weekly gain since late February.

Brent's November contract rose $3.57 to settle at $114.68 a barrel, while US November crude rose $2.57 to $86.80.

Energy companies pushed higher along with the oil prices. Suncor Energy posting the strongest performance on the index, rising 5.32 percent to C$30.69.

Canadian Natural Resources rose 3.81 percent to C$32.94, Cenovus Energy added 3.36 percent to C$35.41 and Canadian Oil Sands finished 4.29 percent higher at C$22.84.

"If you go back to the Oct. 4 low, we're up about 7 percent from that. Everything is looking a lot more attractive in the commodities sector. Even natural gas is moving up today, which has been one of the markets that has been quite negative," said John Kurgan, senior market strategist from MF Global Canada.

The Toronto Stock Exchange's S&P/TSX composite index ended up 169.84 points, or 1.43 percent, at 12,081.73. Eight of the 10 main sectors were higher, with consumer staples and utilities sectors posting modest declines.

On the week, the TSX rose 4.3 percent, its biggest weekly gain since October 2009.

"The TSX is benefiting from a big surge in risk appetite over the last week, especially since the turnaround from Oct. 4, said Elvis Picardo, strategist and vice-president at Global Securities in Vancouver.

"The rebound in risk capital is being manifested in big gains in the energy and commodity groups. And when that happens, the TSX benefits proportionately from those moves."

Toronto stocks also benefited from promising US data. US retail sales grew at the fastest pace in seven months, helping to buoy investor confidence and send gold and copper higher.

The market mood was also lifted by hopes of a resolution to the euro zone debt crisis as G20 finance ministers and central bankers meet in Paris this weekend.

Spot gold rose 2.5 percent for the week, ending at $1,680.39. That was its biggest weekly gain in six weeks as bullion prices rose with equities and the US dollar fell as risk appetite returned and investors shifted away from safe-haven investments like the greenback.

Barrick Gold rose 1.58 percent to C$48.76 and GoldCorp rose 1.96 percent to end at C$48.84.

"Much of this turnaround in risk has been predicated on a return to some semblance of normalcy in Europe," said Picardo.

"The market is primed for something positive to come out over the weekend or the next couple of weeks. Any disappointment on that front has the potential to perhaps cause investors to reassess the situation and take part in some profit-taking."

Financials showed mixed results, see-sawing between gains and losses most of the day before ending 0.48 percent higher. Manulife Financial maintained its rise; ending up 3.85 percent at C$12.94, while a number of the big six banks remained in negative territory.

Extending losses from Thursday on disappointing results from US bank JP Morgan Chase, Royal Bank of Canada was among the largest decliners, sliding 0.25 percent to C$47.70, while Bank of Montreal was down 0.05 percent at C$58.59.

"Financials are one sector that continues to be a little bit shaky, not just from somewhat weak results in the US, but many European banks are under serious stress," said Picardo.

"Canadian banks are still holding up really well, but that being said, we feel the impact of those negative news items from time to time."

Copyright Reuters, 2011

Read Comments