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TSX Settles Higher On Commodities - Canadian Commentary

Canadian stocks rallied to settle higher for a second day Thursday, driven by rising commodity prices that helped lift energy and mining issues. Toronto stocks were also supported by some mixed of economic data from both sides of the border, as well as some speculation of China growth.

While Canada reported a decline in its trade surplus for February, data from the U.S. revealed trade deficit shrunk dramatically in February, dropping to the lowest level in several years. Meanwhile, cues from the eurozone came in mostly encouraging, with the euro area industrial output indicating an unexpected rise, and Italy succeeded in raising debt closer to the upper ceiling of its targeted amount.

Toronto's main index, the S&P/TSX, closed Thursday at 12,214.65, up 187.89 points or 1.56 percent. The S&P/TSX Composite Index touched an intraday high of 12,230.54 and a low of 12,023.37.

The TSX Venture Index closed at 1,472.50, an increase of 37.38 points or 2.60 percent. The index opened at 1,439.36 compared to its previous close of 1,435.12.

All major components of the S&P/TSX Index were in positive territory, with the exception of the Capped Consumer Staples Index and the Utilities Index.

The major gainer of the day was the Metals & Mining Index that surged 3.96 percent, led by First Quantum Minerals (FM.TO) up 4.50 percent and Teck Resources Ltd. (TCK_B.TO) up 4.41 percent. Lundin Mining Corp. (LUN.TO) added 3.48 percent after the miner said it would acquire an 80 percent interest in the Touro copper project, owned by two private Spanish companies for about 60 million euros.

The Energy Index advanced 2.45 percent with Light Sweet Crude Oil futures for May, gaining $0.94 or 0.9 percent to close at $103.54 a barrel on the NYMEX Thursday.

Among energy stocks, Suncor Energy Inc. gained 2.76 percent, Canadian Natural Resources Limited (CNQ.TO) moved up 4.23 percent, and Talisman Energy Inc. (TLM.TO) surged 5.03 percent. Nexen Inc. (NXY.TO) gained 3.92 percent, while Canacol Energy Ltd. (CNE.TO) shed 6.98 percent.

Smartphone maker Research In Motion (RIM.TO) gained 1.37 percent, while transportation systems maker Bombardier (BBD.B.TO) moved up 2.54 percent.

Gold stocks were down with futures for June delivery shedding $20.30 or 1.2 percent to close at $1,680.60 an ounce Thursday on the NYMEX. The Global Gold Index jumped 2.93 percent.

Among gold stocks, B2Gold Corp. (BTO.TO) gained 4.96 percent, Lake Shore Gold Corp. (LSG.TO) surged 8.05 percent, Goldcorp. (G.TO) gained 2.40 percent. Kinross Gold Corp. (K.TO) moved up 2.93 percent, while Barrick Gold Corp. (ABX.TO) gathered 1.84 percent. Eldorado Gold (ELD.TO) soared nearly 11.31 percent.

The Materials Index jumped 2.96 percent mostly on gold mining stocks. Potash Corporation of Saskatchewan Inc. (POT.TO) edged up 0.79 percent, while Uranium One Inc. (UUU.TO) gained 4.48 percent. Eastern Platinum Limited (ELR.TO) gained 1.33 percent.

The Financial Index gained 1.32 percent with Manulife Financial Corp. (MFC.TO) surging 6.10 percent, Royal Bank of Canada (RY.TO) up 0.92 percent, and Bank of Nova Scotia (BNS.TO) advanced 0.78 percent.

BMO Financial Group (BMO.TO) edged up 0.69 percent after revealing plans to acquire CTC Consulting, LLC, headquartered in Portland, Oregon.

Cable telecommunications services provider Cogeco Cable Inc. (CCA.TO) shed 2.20 percent after reporting earnings that came in below consensus. The company's earnings from continuing operations dropped to C$0.63 per share from C$0.85 per share a year ago, while analysts expected earnings of C$0.99 per share for the quarter.

Media and entertainment company Corus Entertainment (CJR_B.TO) shed over 2 percent despite reporting a much improved second quarter net profit of C$31.60 million or C$0.38 per share from last year.

In economic news, Statistics Canada said trade surplus decreased from $1.9 billion in January to $292 million in February as exports declined 3.9 percent and imports edged up 0.2 percent.

From south of the border, a U.S. Labor Department report showed initial jobless claims rose to 380,000 from the previous week's revised figure of 367,000. Economists expected jobless claims to edge up to 359,000 from the 357,000 originally reported for the previous week.

A separate report from the US Commerce Department showed U.S. exports ticking up slightly and imports falling, indicating a trade deficit to $46 billion, down from the $52.5 billion posted in January. Analysts expected the deficit to shrink somewhat from January levels, but the consensus was a much higher deficit of about $51.7 billion.

In the euro area, industrial production increased unexpectedly in February, helped mostly by a marked increase in energy production, as per the Eurostat. Industrial production moved up 0.5 percent on a monthly basis in February, after remaining flat in the previous month. Economists expected a 0.2 percent decrease. Production in the 27-member European Union edged up 0.2 percent month-on-month during the period.

The World Bank trimmed its 2012 growth estimate for China, as domestic demand growth as well as investment decelerates amid weak foreign orders. Nevertheless, the lender sees prospects of a soft landing.

China's growth projection for this year was lowered to 8.2 percent from its January estimate of 8.4 percent, while the prospects for a gradual adjustment of growth remain high.

by RTTNews Staff Writer

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