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Oct. 24, 2011, 5:19 p.m. EDT

Canada stocks up on precious metals, EU hopes

Silvercorp Metals up as much as 21% after accounting audit

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By Nicole Hong, MarketWatch

SAN FRANCISCO (MarketWatch) — Canadian stocks followed global shares higher on Monday after progress in the euro-zone debt negotiations and Chinese manufacturing data lifted investor sentiment.

The benchmark S&P/TSX Composite Index   gained 212.79 points, or 1.8%, at 12,162.28. This was the index’s highest close in nearly five weeks.

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The impact of a debt deal

Unless France and Germany can find a way to resolve those differences over the next few days, both the euro and the European Union itself could start to unravel-a terrifying prospect. WSJ Brussels Bureau Chief Stephen Fidler discusses on Markets Hub.

European leaders said Sunday that discussions were progressing over European bank recapitalization, Greek debt restructuring and the euro-zone bailout fund. A final package of measures is expected at a second summit on Wednesday. Read more on the EU summit.

Metals and mining stocks were up sharply, as gold futures tracked the rise in U.S. stocks. Shares of Teck Resources Ltd.  added 5.8% while shares of First Quantum Minerals Ltd. /zigman2/quotes/209694942/delayed CA:FM +2.13% jumped 11.5%.

Among notable movers, shares of Silvercorp Metals Inc. /zigman2/quotes/210397281/delayed CA:SVM +4.87% soared as high as 20.7% after the miner said an audit of the company’s accounting practices backed the company’s financial statements against recent fraud allegations.

Precious metals followed U.S. stocks higher on Monday. Gold for December delivery  rose $16.20, or 1%, to settle at $1652.30 an ounce on the New York Mercantile Exchange. Silver added 1.5%, and copper jumped 7%. Read more on precious metals.

Also boosting mining stocks, Chinese data on Monday showed manufacturing expanded to a five-month high in October, quelling fears of an extended contraction. Read more on the Chinese manufacturing data.

Crude-oil futures also rallied on optimism, lifting Toronto’s energy sector. Shares of heavyweight Suncor Energy Inc. /zigman2/quotes/204570600/delayed CA:SU +0.23%   /zigman2/quotes/210480277/composite SU -0.60%  gained 4.3%, with shares of Canadian Oil Sands Ltd.  adding 3.6%.

Crude for December delivery  gained $3.87, or 4.4%, to finish at $91.27 a barrel on the New York Mercantile Exchange. Read more on oil.

The Canadian dollar strengthened 0.6% against its U.S. counterpart /zigman2/quotes/210561978/realtime/sampled USDCAD +1.0889% , with one U.S. dollar recently purchasing 1.0029 Canadian, versus 1.0088 late Friday. The loonie has rebounded nearly 6% against the greenback since the Canadian currency depreciated to a one-year low on Oct. 4.

On Tuesday, the Bank of Canada will convene to announce its quarterly interest rate decision. Analysts largely expect the central bank to keep the key rate unchanged at 1%.

“We continue to believe that the BoC is unlikely to cut its policy rates and that such a change would require a dramatic weakening of the global economy and a strong tightening of global financial conditions,” wrote analysts at Nomura Global Economics, adding that domestic factors like high consumer debt and housing prices will limit the bank’s willingness to slash rates.

/zigman2/quotes/209694942/delayed
CA : Canada: Toronto
$ 23.45
+0.49 +2.13%
Volume: 2.52M
Sept. 30, 2022 4:00p
P/E Ratio
9.46
Dividend Yield
1.36%
Market Cap
$15.88 billion
Rev. per Employee
$584,642
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/zigman2/quotes/210397281/delayed
CA : Canada: Toronto
$ 3.23
+0.15 +4.87%
Volume: 262,753
Sept. 30, 2022 4:00p
P/E Ratio
15.93
Dividend Yield
0.98%
Market Cap
$545.11 million
Rev. per Employee
$211,385
loading...
/zigman2/quotes/204570600/delayed
CA : Canada: Toronto
$ 38.90
+0.09 +0.23%
Volume: 6.49M
Sept. 30, 2022 4:19p
P/E Ratio
5.94
Dividend Yield
4.83%
Market Cap
$52.96 billion
Rev. per Employee
$3.01M
loading...
/zigman2/quotes/210480277/composite
US : U.S.: NYSE
$ 28.15
-0.17 -0.60%
Volume: 4.36M
Sept. 30, 2022 4:00p
P/E Ratio
5.45
Dividend Yield
4.88%
Market Cap
$38.62 billion
Rev. per Employee
$2.37M
loading...
/zigman2/quotes/210561978/realtime/sampled
US : Tullett Prebon
1.3833
+0.0149 +1.0889%
Volume: 0.0000
Sept. 30, 2022 4:59p
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Nicole Hong is a MarketWatch reporter, based in San Francisco.

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