Investor Alert

Canadian Markets

Feb. 8, 2012, 5:24 p.m. EST

Canada stocks rise on Greek debt talks progress

By Myra P. Saefong, MarketWatch , Warangkana Chomchuen

NEW YORK (MarketWatch) — Canadian stocks finished slightly higher Wednesday, finding last-minute support on a report Greece had moved closer to a deal to ensure further financing from the European Union and International Monetary Fund.

Prolonged negotiations over a Greek debt agreement to clinch a second round of bailout funds had kept investors on edge during the trading session.

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After making moderate gains in early trade then spending much of the session lower, the S&P/TSX Composite Index  tacked on 8.60 points, or 0.1%, by the close to finish at 12,521.02.

Hopes for resolution to the Greek debt situation had risen early Wednesday after Dow Jones reported the ECB was prepared to exchange its holdings of Greek government bonds at a price below face value to help ease Greek’s debt burden. Read more on Greek bailout talks.

Late Wednesday, Bloomberg News reported that Greece promised to reduce the minimum wage by 20% and lower pension payments as part of a deal with the EU and IMF to secure funds. Read more on troika deal.

“We started out nicely over optimism that Greek politicians will be able to reach an agreement [needed to secure bailout funds],” said Peter Buchanan, senior economist at CIBC World Markets.

“We pulled back a bit mainly on concerns that Greece may not reach an agreement,” Buchanan said.

For much of the last year, global financial markets have been influenced by the fits and starts of Europe’s sovereign debt crisis, where the possibility of one or more sovereign defaults has threatened global growth prospects.

The S&P/TSX Composite Index dropped 0.4% Tuesday, logging its lowest closing level since Jan. 31.

Industrials gain, tech falls

Gains in the industrial sector were helped by a 4.2% increase in shares of WestJet Airlines Ltd. . The airline reported better-than-expected quarterly earnings and said its employees had endorsed its plan to start a regional carrier to serve smaller market.

Shares of fertilizer producer Agrium Inc closed up 1.9%. Agrium Inc. reported a 43% increase in its fourth-quarter net profit over a year ago.

Among the subsectors Wednesday, technology was among the bigger decliners.

The S&P/TSX Capped Information Technology Index (TORONTO:XX:TORGC194)  fell 0.6%, with Research In Motion Ltd  falling 1.5%. (TORONTO:XX:TORGC187)

The S&P/TSX Capped Energy Index (TORONTO:XX:TORGC187)  dipped 0.1%. Canadian Natural Resources Ltd. (TSE:CA:CNQ)  dropped 1.6%. Shares of Encana Corp.  was down 1.8%.

In metals and mining, shares of Teck Resources Ltd.   lost 2%.

Shares of Goldcorp Inc. (TSE:CA:G)   dropped 1.3% after Canadian regulators alleged Goldcorp’s chairman, Ian Telfer, was involved in an illegal insider-trading scheme. Read more on Goldcorp.

The Ontario Securities Commission said Telfer didn’t participate directly in the alleged scheme, which the agency said spanned from April 2007 to February 2008.

But the OSC said Telfer helped facilitate activity related to the scheme involving an executive assistant at a Toronto-based investment bank.

Telfer said in a statement that he “categorically denied” the OSC allegations.

TMX Group (TSE:CA:X) , which operates the Toronto Stock Exchange, ended down 0.4% after its quarterly profit fell 21%.

Bond issue

The Canadian government issued a $3 billion global bond Tuesday to supplement and diversify the country’s foreign exchange reserves, said the finance department.

The five-year bond is the third foreign currency bond Canada issued since 2009.

“This bond transaction achieved all of the Government’s objectives, including providing cost-effective and diversified funding for the foreign reserves held in the Exchange Fund Account,” the statement said.

“The investor base for the bond issuance includes a wide range of central banks, other official institutions and foreign-based investment funds across a diverse geographical area.”

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