Canadian stocks snapped a five-day losing streak to settle significantly higher Thursday, on global cues and some positive developments in the eurozone with Spain unveiling its economic reform focused budget. China channeled huge funds into money markets which lifted investor sentiments, notwithstanding some soft macroeconomic data globally.
The Spanish government unveiled plans for economic reforms to revive the country's sagging economy, revealing a tight 2013 budget focused on spending cuts rather than tax hikes. The government will also establish an independent fiscal authority to oversee the spending cuts, with 43 new reform laws to be enacted over the next six months. Spain also expects to be in mild recession for the year.
Markets also welcomed the People's Bank of China's injection of a record CNY 365 billion into money markets this week. The central bank conducted another CNY 180 billion in reverse repo transactions Thursday morning after a record CNY 290 billion injection on Tuesday. The cash injection is intended to meet rising demand at the quarter-end.
The S&P/TSX Composite Index closed Thursday at 12,338.85, up 105.99 points or 0.87 percent. The index touched an intraday high of 12,363.27 and a low of 12,241.46.
The Metals & Mining Index surged 1.99 percent, with First Quantum Minerals Ltd. (FM.TO) gaining 3.06 percent and Teck Resources Limited (TCK.B.TO) edging up 0.07 percent. Inmet Mining Corp. (IMN.TO) gained 2.95 percent, while Lundin Mining Corp. (LUN.TO) surged 4.80 percent.
The Energy Index spiked 1.21 percent, with U.S. crude oil futures for November delivery jumping $1.87 or 2.1 percent to close at $91.85 a barrel Thursday on the NYMEX.
Among energy stocks, Suncor Energy Inc. (SU.TO) was up 1.28 percent, Talisman Energy Inc. (TLM.TO) was up 1.89 percent, Canadian Natural Resources Limited (CNQ.TO) was up 0.92 percent, and Encana Corp. (ECA.TO) slipped 0.33 percent.
The Global Gold Index soared 2.14 percent, with gold futures for December delivery surging $26.90 or 1.5 percent to close at $1,780.50 an ounce Thursday on the NYMEX.
The Capped Materials Index gained 1.87 percent, with fertilizer maker Potash Corporation of Saskatchewan Inc. (POT.TO) dropping 0.07 percent.
Among gold stocks, Barrick Gold Corp. (ABX.TO) was up 1.64 percent, Goldcorp Inc. (G.TO) gained 2.55 percent, Yamana Gold Inc. (YRI.TO) gathered 2.46 percent, Eldorado Gold Corp. (ELD.TO) gained 2.62 percent, and Kinross Gold (K.TO) moved up 2.69 percent. B2Gold Corp. (BTO.TO) gained 0.76 percent.
The Financial Index jumped 0.79 percent, with Royal Bank of Canada (RY.TO) up 0.93 percent, Manulife Financial Corp. (MFC.TO) gained 1.54 percent, Bank of Nova Scotia (BNS.TO) gathered 1.24 percent, and Toronto-Dominion Bank (TD.TO) moved up 0.50 percent.
Transportation systems maker Bombardier Inc. (BBD.A.TO, BBD.B.TO) gained 2.20 percent.
The Information Technology Index gained 1.22 percent. Smartphone maker Research In Motion Limited (RIM.TO) moved up 1.16 percent. The company is slated to reveal its second quarter financial results later today.
Precious metals company Gold Canyon Resources (GCU.V) gained nearly 5.49 percent after revealing the appointment of Troy Fierro as Chief Executive Officer effective September 26 and Akiko Levinson, the former CEO, will continue to serve as President and Director.
In economic news from south of the border, the U.S. Labor Department said that jobless claims fell to 359,000 in the week ended September 22 from the previous week's revised figure of 385,000. Economists had expected jobless claims to drop to 376,000 from the 382,000 originally reported for the previous week.
A report from the Commerce Department showed that U.S. gross domestic product increased at an annual rate of 1.3 percent in the second quarter compared to the previous estimate of 1.7 percent growth. The downward revision came as a surprise to economists, who had expected the rate of second quarter GDP growth to be unrevised.
Separately, the Commerce Department said durable goods orders fell by 13.2 percent in August following a revised 3.3 percent increase in July. Economists anticipated durable goods orders to drop by a more modest 5.0 percent. Excluding a 34.9 percent drop in orders for transportation equipment, durable goods orders fell by a much more modest 1.6 percent in August compared to a 1.3 percent drop in July. Economists expected ex-transportation orders to rise by 0.2 percent.
After jumping to a two-year high in the previous month, pending home sales in the U.S. unexpectedly saw a notable pullback in the month of August, a report by the National Association of Realtors on Thursday showed. The pending home sales index dropped 2.6 percent to 99.2 in August after rising by 2.6 percent to 101.9 in July. Economists expected pending home sales to edge up by another 0.3 percent. according to
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Meanwhile, data out of China revealed industrial firms' profits dropped for a fifth successive month in August, signaling that the economic slowdown probably extended into the third quarter. Industrial profit fell 6.2 percent year-on-year to 381.2 billion yuan in August, the National Bureau of Statistics said. This was faster than the 5.4 percent drop in July
Eurozone economic confidence deteriorated to 85 in September from 86.1 in August, data from the European Commission showed. The reading was expected to remain unchanged at 86.1.
Germany's unemployment increased by 9,000 in September from the prior month, the Federal Labor Agency said. Economists had forecast unemployment to rise by 10,000. On a seasonally adjusted basis, the jobless rate came in at 6.8 percent, unchanged from the prior month and matched economists' expectation.
by RTT Staff Writer
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