News from china yields solid advance
The Toronto stock market registered a solid triple digit advance Tuesday as positive inflation data from China boosted commodity prices and resource stocks.
The S&P/TSX composite index ran ahead 139.49 points to 12,484.05 after government data showed China’s consumer prices rose at a 2.1% rate in March.
That was down from the previous month’s 3.2% and well below the official target of 3.5% for the year. Wholesale prices in the world’s second-largest economy declined by 1.9% compared with last year.
The showing gives China some leeway in being able to take further measures to stimulate growth, particularly if industrial production figures coming out next week show activity weaker than expected.
“It’s a good thing for us in Canada (because) it allows them to do whatever they need to do to make sure their economy continues to move higher,” said Allan Small, senior adviser at DWM Securities.
“The hope is that they continue to build up their infrastructure and that can only be good for what we offer here in Canada, materials and mining and commodities and so forth.”
The Canadian dollar rose US0.1¢ to US98.4¢ amid positive housing data.
Canada Mortgage and Housing Corp. reported that housing starts in Canada were at an annualized rate of 184,028 units last month, up slightly from 183,207 in February. That was well above the 175,000 economists had forecast.
U.S. indexes gained strength during the afternoon after aluminum company Alcoa got the first-quarter earnings season off to a positive start after the market close Monday by beating earnings expectations and delivering a strong outlook.
The Dow Jones industrial average gained 59.98 points to 14,673.46, the Nasdaq composite index climbed 15.61 points to 3,237.86 and the S&P 500 index moved up 5.54 points to 1,568.61.
Alcoa posted net income in the first quarter of US$149 million, or 13¢ per share, compared with $94 million, or 9¢ per share, a year earlier. Earnings ex-items came in at 11¢ per share, beating analysts’ forecast of eight cents per share, according to FactSet.
But Alcoa’s revenue fell to $5.83 billion from $6.01 billion a year earlier and was below the $5.91 billion analysts predicted as results were weighed down by depressed aluminum prices, which offset demand from auto and plane makers.
However, the company still sees demand for aluminum growing 7% in 2013, with gains cutting across many industries. Its stock was unchanged at US$8.39 after rising 15 cents Monday ahead of the earnings announcement.