Canadian stocks ended higher Monday, led by gold and mining issues even as investors continued to weigh the eurozone debt problems with borrowing costs at the Spanish and Italian bond auctions rising to record levels. The positive outcome of the Greek elections lifted stocks, easing concerns that the nation would drop out of the eurozone. Investors will now focus on the outcome of the Group of 20 Summit meeting underway in Mexico.
In Greece, the New Democracy party registered a narrow win in the parliamentary elections, ending speculations that the country may be forced to quit the eurozone.
Spain's 10-year government bond yields jumped to a euro-era high of 7.14 percent, an increase of 30 basis points. Italy's 10-year government bond auction on Monday also witnessed yields surging to 6.07 percent, an increase of 14 basis points. The exorbitant borrowing costs impacted most European stock markets, offsetting gains made after the Greek election results.
Toronto's main index, the S&P/TSX, closed Monday at 11,601.13, up 76.23 points or 0.66 percent. The S&P/TSX Composite Index touched an intraday high of 11,635.06 and a low of 11,483.73.
The TSX Venture Index closed at 1,259.75, up 8.73 points or 0.70 percent. The index opened at 1,255.72 compared to its previous close of 1,251.02.
Almost all major components of the S&P/TSX Index were in positive territory with the exception of the Financials Index that shed 0.35 percent. Among major gainers were the Metals & Mining Index up 2.38 percent, the Materials Index up 2.18 percent, and the Global Gold Index up 2.15 percent.
The Metals & Mining Index gains were led by Lundin Mining Corp. (LUN.TO) that was up 4.58 percent, First Quantum Minerals Limited (FM.TO) up 2.26 percent, and Teck Resources Limited (TCK_B.TO) gathering 1.15 percent. Osisko Mining Corp. (OSK.TO) advanced 0.74 percent.
Gold futures for August delivery dropped $1.10 or 0.1 percent to close at $1,627.00 an ounce Monday on the NYMEX.
Among gold stocks, Extorre Gold Mines Ltd. (XG.TO) soared over 68 percent to C$4.19 after announcing its acquisition by Yamana Gold for C$4.26 per share. Yamana Gold Inc. (YRI.TO) gained 2.20 percent.
Eldorado Gold Corp. (ELD.TO) gained 2.04 percent, while Kinross Gold Corp. (K.TO) moved up 3.76 percent. Barrick Gold Corp. (ABX.TO) moved up 2.23 percent, Goldcorp. (G.TO) was up 1.29 percent.
Among Materials issues, Potash Corporation of Saskatchewan Inc. (POT.TO) moved up 1.58 percent and Eastern Platinum Limited (ELR.TO) gained 2.44 percent.
U.S. crude oil futures for July delivery dropped $0.76 or 0.9 percent to close at $83.27 a barrel Monday on the NYMEX.
The Energy Index gained a modest 0.02 percent with Encana Corp. (ECA.TO) gathering 1.42 percent, Canadian Natural Resources Limited (CNQ.TO) up 2.50 percent, and Suncor Energy Inc. (SU.TO) advancing 0.83 percent. Talisman Energy Inc. (TLM.TO) dropped 0.68 percent, while Cenovus Energy Inc. (CVE.TO) slipped 0.12 percent.
Transportation systems maker Bombardier Inc. (BBD.A.TO), gained 3.58 percent. The company's rail systems division obtained a $631 million contract by the San Francisco Bay Area Rapid Transit District..
Celestica Inc. (CLS.TO) gained 2.63 percent after its decision to close manufacturing services for Blackberry maker Research in Motion (RIM.TO) over the next six months. The smartphone maker dropped nearly 3 percent.
The Financial Index dropped with Royal Bank of Canada edging down 0.66 percent and Toronto-Dominion Bank (TD.TO) down 0.52 percent. Manulife Financial Corp. (MFC.TO) gained 2.50 percent.
The Health Care Index was up 2.18 percent, with drug maker Valeant Pharmaceuticals (VRX.TO) gaining 3.27 percent and SXC Health Solutions (SXC.TO) adding 3.97 percent.
Global logistics technology solutions provider Descartes Systems Group (DSG.TO) said it has closed its acquisition of substantially all of the assets of Integrated Export Systems, Ltd. and IES Asia Ltd for about $ 35.0 million. The stock gained 0.59 percent.
Insurance services provider Fairfax Financial Holdings Ltd. (FFH.TO) edged up 0.02 percent after announcing that its RiverStone runoff subsidiary would buy all the outstanding shares of Brit Insurance Ltd., for about $300 million.
In economic news, Statistics Canada said non-resident investors acquired $10.2 billion of Canadian securities in April, following a divestment in the previous month. Foreign investors acquired $9.0 billion of Canadian bonds in April after a $1.2 billion divestment in March. Meanwhile, Canadian investors' holdings of foreign securities declined $2.7 billion, predominantly in bonds.
From south of the border, the National Association of Home Builders said the NAHB/Wells Fargo Housing Market Index crept up to 29 in June from a downwardly revised 28 in May. Economists expected the index to come in unchanged compared to the 29 originally reported for the previous month. The index rose to its highest level since coming in at 30 in May of 2007.
From the eurozone, bad loans at Spanish banks increased to an 18-year high in April, Bank of Spain said Monday. Around 8.72 percent of the loans held by banks were unpaid for more than three months, up from 8.37 percent in March. The ratio was the highest since April 1994. Doubtful debt rose by 4.77 billion euros to 152.74 billion euros in April.
The property market crash as well as Spain's record high unemployment rate in the euro area raised banks' bad loans. The European Central Bank's net lending to Spanish banks surged to an all-time high of 287.8 billion euro in May from 263.5 billion euro in April.
by RTT Staff Writer
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