Canadian stocks scaled the 12-000 mark to end at a three-month high Thursday, led mostly by mining issues and commodities as investors weighed the possibility of further quantitative easing in the near future. Investor sentiments improved after the German Chancellor Angela Merkel reiterated her country's commitment to the euro and supported the European Central Bank President Mario Draghi's efforts to this end.
The S&P/TSX Composite Index closed Thursday at 12,032.58, up 127.14 points or 1.07 percent. The Index touched an intraday high of 12,032.58 and a low of 11,918.08.
The Metals & Mining Index jumped 2.85 percent, with Teck Resources Limited (TCK.B.TO) up 2.55 percent, Lundin Mining Corp. (LUN.TO) up 2.25 percent, Osisko Mining Corp. (OSK.TO) up 1.40 percent, and First Quantum Minerals Ltd. (FM.TO) up 2.93 percent.
A report from the World Gold Council Thursday revealed gold demand declined in the second quarter as investment and jewelery requirement softened in India and China. Gold demand in the second quarter fell 7 percent to 990 tonnes from a year ago.
The Global Gold Index surged 3.20 percent, with gold futures for December delivery gaining $12.60 or 0.8 percent to close at $1,619.20 an ounce Thursday on the NYMEX. The Capped Materials Index soared 3.00 percent.
Barrick Gold (ABX.TO) gained 3.91 percent amid reports the company is considering sale of its 74 percent stake in its subsidiary African Barrick Gold plc (ABG.L, ABGLF.PK).
Among other gold stocks, Goldcorp Inc. (G.TO) surged 4.66 percent, Yamana Gold Inc. (YRI.TO) gained 2.75 percent, Eldorado Gold Corp. (ELD.TO) moved up 4.63 percent, Kinross Gold (K.TO) gained 2.61 percent, and IAMGOLD Corporation (IMG.TO) gathered 4.01 percent.
The Energy Index gained 1.16 percent with U.S. crude oil futures for September delivery gaining $1.27 or 1.4 percent to close at $95.60 a barrel Thursday on the NYMEX.
Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) moved up 2.40 percent, Suncor Energy Inc. (SU.TO) gained 0.98 percent, and Encana Corp. (ECA.TO) moved up 1.27 percent. Progress Energy Resources Corp. (PRQ.TO) shed 0.36 percent, while Pacific Rubiales Energy Corp. (PRE.TO) gained nearly 4 percent.
The Financial Index gained 0.86 percent with Royal Bank of Canada (RY.TO) up 1.38 percent, Bank of Nova Scotia (BNS.TO) gained 0.78 percent, and Toronto-Dominion Bank (TD.TO) moved up 0.86 percent. Manulife Financial Corp. (MFC.TO) gained 2.12 percent.
Among heavyweights, fertilizer maker Potash Corporation of Saskatchewan Inc. (POT.TO) gained 1.64 percent, while aerospace and transportation company Bombardier Inc. (BBD.A.TO, BBD.B.TO) ended flat with yesterday. Smartphone maker Research In Motion (RIM.TO) edged up 0.13 percent.
In corporate news, precious metals company Dynasty Metals & Mining Inc. (DMM.TO) shed 2.26 percent despite reporting a narrower second-quarter loss of $1.01 million compared to $1.47 million recorded a year ago.
Leather apparel and accessories maker Danier Leather Inc. (DL.TO) shed 4.44 percent after reporting a wider fourth quarter net loss.
In economic news, Statistics Canada said non-residents reduced their holdings of Canadian securities by $7.9 billion in June, following two straight months of acquisitions totaling $36.3 billion. Meanwhile, Canadian investors added $3.9 billion of foreign securities to their portfolio, mainly US government bonds.
Separately, the agency said manufacturing sales fell 0.4 percent to $48.9 billion in June, reflecting a 10.6 percent drop in sales of petroleum and coal products. Excluding petroleum and coal products, sales rose 1.1 percent.
In economic news from the U.S., a report from the Labor Department showed initial jobless claims to have crept up to 366,000 from the previous week's revised figure of 364,000. Economists expected an increase in jobless claims to 365,000 from the 361,000 originally reported for the previous week.
The U.S. Commerce Department said new privately-owned housing starts came in at a seasonally adjusted annual rate of 746,000 in July, a 1.1 percent drop from June levels. Most economists had predicted a drop in housing starts from the rebound in June. However, new building permits jumped significantly in July, rising 6.8 percent to a seasonally adjusted annual rate of 812,000 - the highest level since August 2008.
The Philadelphia-area manufacturing firms have continued to report weak business conditions in the month of August, a report by the Federal Reserve Bank of Philadelphia said Thursday. The Philly Fed said its diffusion index of current activity was at a negative 7.1 in August compared to a negative 12.9 in July, although a negative reading continues to indicate a contraction in regional manufacturing activity. Economists expected the index at a negative 5.0. Despite the improvement, the Philly Fed Index remained in negative territory for the fourth consecutive month.
Eurozone annual inflation for July remained stable at 2.4 percent, final data from Eurostat showed Thursday. The rate was also in line with flash estimates. On a monthly basis, consumer prices were down 0.5 percent in July. The central bank aims to retain inflation rates below, but close to, 2 percent over the medium term.
From Europe, the Office for National Statistics showed U.K. retail sales grew 0.3 percent in July from a month ago. Economists had forecast a slight 0.1 percent drop after rising 0.8 percent in June. On a yearly basis, sales volume advanced 2.8 percent year-on-year. The increase was better than the 2.6 percent growth logged in June and the consensus forecast of 1.4 percent.
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