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TSX Ends Higher As Europe Concerns Ease - Canadian Commentary

Canadian stocks closed higher Tuesday, on strength from resource issues after some positive economic data from Europe eased eurozone debt concerns with Germany's economic sentiment improving for a fifth straight month. In Spain, government bonds were auctioned above target levels, although at a higher cost.

In Canada, the central bank left its key rates unchanged at 1 percent, indicating overall economic momentum in the country to be slightly firmer than expected in January. Bank of Canada projects the economy to grow by 2.4 percent in both 2012 and 2013 before moderating to 2.2 per cent in 2014.

Toronto's main index, the S&P/TSX, closed Tuesday at 12,136.94, up 99.35 points or 0.83 percent. The S&P/TSX Composite Index touched an intraday high of 12,176.76 and a low of 12,039.70.

The TSX Venture Index closed at 1,422.30, down 10.15 points or 0.71 percent. The index opened at 1,433.17 compared to its previous close of 1,432.45.

All components of the S&P/TSX Index were in positive territory led by resource stocks, with the Energy Index up 1.38 percent.

In the commodity markets, Light Sweet Crude Oil futures for May delivery gained $1.27 or 1.2 percent to close at $104.20 a barrel on the NYMEX Tuesday.

The Energy sector gains were led led by Suncor Energy (SU.TO) adding 2.01 percent, Canadian Natural Resources Limited (CNQ.TO) up 2.32 percent, and Talisman Energy Inc. (TLM.TO) gaining 2.96 percent. Cenovus Energy Inc. (CVE.TO) moved up 1.24 percent.

The Materials Index gained 0.53 percent, with Uranium One Inc. (UUU.TO) surging 12.78 percent. Potash Corporation of Saskatchewan Inc. (POT.TO) moved up 1.38 percent.

Uranium miner Energy Fuels Inc. (EFR.TO) soared 20 percent after agreeing to buy Denison Mines Corp. (DML.TO) mining assets and operations in the US for 425.44 million of its common shares. Denison Mines Corp. (DML.TO) surged over 17 percent.

Gold futures for June delivery gained $2.10 or 0.1 percent to close at $1,651.80 an ounce Tuesday on the NYMEX. The Global Gold Index gathered 0.13 percent.

Among gold stocks, Yamana Gold Inc. (YRI.TO) lost 1.28 percent, while Eldorado Gold Corp. (ELD.TO) gained 0.98 percent. B2Gold Corp. (BTO.TO) ended flat, while Torex Gold Resources Inc. (TXG.TO) shed 6.15 percent. Kinross Gold Corp. (K.TO) was flat, while Barrick Gold Corp. (ABX.TO) edged up 0.42 percent.

Meanwhile, gold mining and exploration company Anaconda Mining (ANX.TO) plunged over 14 percent after reporting a third-quarter profit of C$5.8 million or C$0.03 per share.

Smartphone maker Research In Motion (RIM.TO) gained 0.68 percent amid reports the company seeking to hire a financial adviser to help weigh its strategic options. RIM is looking to hire one Canadian bank and one global bank to help in the process.

Market heavyweight transportation systems maker Bombardier (BBD.B.TO) gained 3.26 percent.

The Financial Index gained 0.91 percent with Manulife Financial Corp. (MFC.TO) moving up 2.63 percent, Royal Bank of Canada (RY.TO) was up 0.87 percent, and Bank of Nova Scotia (BNS.TO) advanced 0.88 percent.

Metals & Mining Index gained 0.47 percent, led by First Quantum Minerals (FM.TO) up 1.01 percent and Teck Resources Ltd. (TCK_B.TO) edging up 0.03 percent. Lundin Mining Corp. (LUN.TO) gained 2.06 percent. Silvermex Resources Inc. (SLX.TO) gained 1.85 percent.

In economic news, Statistics Canada said manufacturing sales edged down 0.3 percent to $49.1 billion in February, following a 1.3 percent decrease in January. Lower sales in the motor vehicle assembly, food, and motor vehicle parts industries were mostly offset by increases in the aerospace product and parts, non-metallic mineral products, and petroleum and coal products industries.

Separately, the agency said the number of new motor vehicles sold in February declined 6.7 percent to 141,589 units, partially offsetting January's gain. Passenger car sales in February decreased 8.3 percent, partially offsetting gains in January. Sales of North American-built passenger cars accounted for most of the decline, falling 10.9 percent.

From the U.S., the Commerce Department said new privately-owned housing starts came in at a seasonally adjusted annual rate of 654,000, a 5.8 percent drop from February levels. Additionally the February figures were revised down slightly from the 698,000 rate initially reported to 694,000. The March rate of new housing starts comes in well below the expectations of most economists, who had predicted a slight uptick to a rate of 700,000.

Eurozone annual inflation for March was revised up to 2.7 percent from 2.6 percent, final data from Eurostat showed. The rate was 2.7 percent in February. Inflation continues to stay above the European Central Bank's 'below, but close to 2 percent' target.

Meanwhile, the Mannheim-based Centre for European Economic Research (ZEW) said Germany's economic sentiment improved for the fifth straight month in April The indicator of economic sentiment rose to 23.4 in April from 22.3 in March. Economists had expected the index to fall to 19.

by RTT Staff Writer

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