GOLD DEAL HELPS DRIVE TSX HIGHER
TORONTO •- Strength in gold stocks pro pelled the Toronto stock market higher Wednesday alongside further data that points to a recovery in the U.S. economy.
Toronto’s main stock index closed the trading session ahead 78.56 points to 14,459.11.
The Canadian dollar slipped 0.03¢ to US 90.62¢.
Leading the charge on the TSX was a major deal between two Canadian gold companies — Yamana Gold and Osisko Mining — which pushed the gold sector higher.
Osisko, which has been seeking an alternative to a hostile takeover offer by Goldcorp., signed a deal to sell a 50% stake in its mining and exploration assets to Yamana.
The agreement, which includes the involvement of the CPP Investment Board the Caisse de dépôt et placement du Québec, values Osisko at about $3.4-billion.
Osisko shares were by far the heaviest traded on the TSX, rising 5.5% to $7.26 on nearly 38 million shares. Yamana stock dropped 28¢ to $9.43 on the TSX.
A higher price for bullion also supported widespread strength among other TSXlisted gold stocks. The June gold contract gained $10.90 to close at $1,290.50 on the New York Mercantile Exchange.
“We’ve been dealing with under performance with the Toronto market for a while now, but that started for change as we got into 2014,” said Andrew Pyle, senior wealth adviser and portfolio manager at ScotiaMcLeod in Peterborough, Ont.
“What we’ve seen this year is a recovery in a lot of sectors that were major drags last year.”
That includes gold stocks, materials, and utilities, which have all gained traction, Pyle said.
The TSX hit its all-time high of 15,073 on June 18, 2008.
Over the past few months, the TSX has grinded its way higher, after eking out small gains in 2013, which looked good against the two previous years when it gave back a combined 14.5%.
BMO Capital Markets chief investment strategist Brian Belski suggests the S&P/ TSX Composite index could fall back to where it started the year, which would mark a decline of about 5%.
On Wall Street, the S&P 500 index closed at another record, up 5.38 points to 1,890.90. The Dow Jones Industrials moved ahead 40.39 points to 16,573 while the Nasdaq rose 8.42 points to 4,276.46.
The move in the U.S. came amid new data on U.S. jobs figures that could push the Federal Reserve to raise interest rates earlier than anticipated.
A survey from payroll processor ADP said that U.S. companies hired at a faster clip in March. Private employers added 191,000 jobs in March, another positive sign for the jobs market ahead of the U.S. non-farm payrolls report and Canadian labour force survey due on Friday.
“[The ADP report] has ... shifted speculation back toward a more hawkish Fed that could start to raise interest rates sooner rather than later after tapering ends later this year,” said Colin Cieszynski, a senior markets analyst at CMC Markets, in a note to investors.