By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — Canadian stocks closed higher Tuesday, with the benchmark Toronto index at its highest level in more than a week, a day ahead of a meeting of European leaders, as investors cheered upbeat U.S. housing data.
“There is optimism in Canada that the [European Union] will announce some positive steps toward dealing with debt crises when leaders meet [Wednesday],” said Malcolm Gissen, co-manager of the Encompass Fund .
European bonds on summit agenda
As the OECD slashes growth forecasts for euro-zone growth, European leaders prepare to meet Wednesday to discuss whether euro-area bonds can play a role in solving the region's crisis. (Photo: Getty.)
“Further, it was reported that China is taking steps to fast track infrastructure investments,” he said.
There are concerns that a slowdown in China will mean far fewer imports of commodities, which are vital to the Canadian economy, said Gissen. But the Organization for Economic Cooperation and Development “just estimated Chinese growth at 8.2%, which is still significant and should bolster confidence of most commodities producers.”
Against that backdrop, the S&P/TSX Composite Index added 1.5% to close at 11,451.71 after tapping a high of 11,534.20, on the heels of Monday’s advance on Wall Street and subsequent gains in Asia and Europe. Read more on Europe Markets.
That was the highest close for the Toronto benchmark since May 14. Trading in the Canadian market was closed Monday for the Victoria Day holiday.
U.S. stocks finished nearly flat Tuesday, though had posted gains throughout most of the session amid data showing that sales of existing homes rose 3.4% in April to a seasonally adjusted annualized rate of 4.62 million. Economists polled by MarketWatch had expected a 4.6 million annual rate. Read more on existing home sales.
Also in Toronto, the S&P/TSX Capped Energy Index /zigman2/quotes/210598495/delayed XX:TORGC187 +0.60% ranked as Tuesday’s biggest gainer, up 2.5%, to take away the spotlight from the S&P/TSX Capped Diversified Metals & Mining Index , which climbed 2.3%. The S&P/TSX Global Gold index /zigman2/quotes/210598462/delayed XX:TORGC190 -0.18% tacked on 2.1%.
Shares of Canadian Natural Resources Ltd. /zigman2/quotes/203742161/delayed CA:CNQ +0.86% climbed 3.5%, Barrick Gold Corp. /zigman2/quotes/209252292/delayed CA:ABX -0.67% added 1.5% and Kinross Gold Inc. /zigman2/quotes/200423011/delayed CA:K -0.51% tacked on 4.3%.
Among the standouts, shares of Ithaca Energy Inc. rallied 22% to C$2.75 after the company said it raised its position in the Carna discovery in the Southern Gas Basin of the U.K. North Sea.
Shares of Niko Resources Ltd. bucked the trend to end 1.4% lower. The company said that along with its partners, it will abandon an exploration site off India’s eastern coast, blaming geological risks as well as the commercial environment in India.
Northern Dynasty Minerals Ltd. /zigman2/quotes/204392939/delayed CA:NDM 0.00% saw its stock drop 35% to C$2.60. The company called a draft Bristol Bay watershed assessment report by the U.S. Environmental Protection Agency on the potential effects of mineral development in southwest Alaska “rushed and inadequate.” Read more on Canada’s hot stocks for Tuesday.
In currencies action, the Canadian dollar traded lower against its U.S. counterpart, with the dollar /zigman2/quotes/210561978/realtime/sampled USDCAD +0.2761% buying C$1.0211, up from C$1.0174 late Monday.