by Jon Cook
Reuters ???Translate This Article
3 August 2012
TORONTO (Reuters) - Canada's main stock index was headed for its largest one-day gain in a month on Friday as financial and resource shares were boosted after the U.S. economy added more jobs than expected in July.
U.S. non-farm payrolls rose 163,000 last month, the Labor Department said, beating economists expectations for a 100,000 gain and offering hope of improvement in the world's largest economy.
The jobless rate, however, inched up to 8.3 percent from 8.2 percent in June.
'It's a bullish report and it furthers the Fed's case that they remain in the back seat waiting to see if there's some kind of further deterioration,' said Michael A. Gayed, CFA is Chief Investment Strategist at Pension Partners, LLC. 'If you look at (U.S.) bond yields rising, it's coinciding with commodities.'
All of Canada's 10 main sectors were higher, led by the powerful energy complex, which rose more than 2 percent as oil prices jumped.
Leading the gains was Suncor Energy, up 3 percent at C$31.46. Canadian Natural Resources jumped 3.9 percent to C$27.80 and Cenovus Energy was up 3 percent to C$31.43.
Canadian financials were also stronger, rising 1.2 percent on the prospect the U.S. economy was stabilizing and possibly shaking off its doldrums.
The biggest mover was Royal Bank of Canada, which climbed 1.5 percent to C$51.65, while Toronto-Dominion Bank was up 1.2 percent at C$78.92 and top insurer Manulife Financial Corp jumped 3.5 percent to C$10.72.
At 10:45 a.m. EDT (1445 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 146.93 points, or 1.3 percent, at 11,653.43. The index was on track for its biggest single-day percentage gain since July 3 when it spiked 2.2 percent.
Gayed noted that Friday's move in equities was equally driven by Thursday's comments from European Central Bank President Mario Draghi, who provided no further stimulus, butreinforced that the bank would act to prevent a collapse in the euro.
'The ECB did exactly what they needed to do, which was to remind the market that they will prevent an event,' he added.
'What has held money back from taking risk is the fear of a 2008 repeat. If you prevent the event, you rally on.'
The heavily weighted materials group, which includes miners, was up 1 percent as copper rebounded after hitting a six-week low on Thursday when the ECB held interest rates and announced no new stimulus plans.
The most influential gainers included Ivanhoe Mines Ltd, which jumped 5.7 percent to C$8.49 after China-owned miner Chalco said it will extend its offer for a majority stake in Mongolia-focused coal miner SouthGobi Resources Ltd. Ivanhoe is South Gobi's majority shareholder.
Diversified miner Tech Resources rose 1 percent to C$27.24 and Barrick Gold shares edged up 0.7 percent to C$32.67.
? Copyright 2012 Reuters
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