TSX BUOYED BY STRONG CHINESE DATA
The Toronto stock market registered a solid gain Thursday, led by mining stocks as strong Chinese trade data pushed prices for oil and copper higher.
The S&P/TSX composite index climbed 77.50 points to 12,599.74 while the TSX Venture Exchange was ahead 10.97 points at 1,240.08. The Canadian dollar rose US0.33¢ to US101.57¢.
China’s export growth more than quadrupled in December from the previous month to 14.1%, while imports rose 6% after no growth in November. Meanwhile, the country’s trade surplus unexpectedly surged to $31.6-billion in the month, leaving the 2012 total at $232-billion, the widest since 2008.
In New York, the Dow Jones industrials was up 80.71 points at 13,471.22, the Nasdaq was 15.95 points higher at 3,121.76 and the S&P 500 index added 11.10 points to a fresh, five-year high of 1,472.12.
The trade figures are good news since they indicate that China is gradually emerging from its worst economic downturn since the 2008 global crisis. Factory output and other activity also improved in the final quarter of 2012, but analysts say a recovery is still shaky for the world’s secondlargest economy.
The World Bank and private sector forecasters expect growth of about 8% in 2012 and about 7.5% this year. That would be stronger than the West and Japan but China’s weakest performance since the 1990s.
Hopes for higher demand pushed up commodity prices. Strong demand for commodities from China in the past has pushed prices for oil and metals higher and also supported energy and mining stocks on the resource-intensive TSX.
“It’s the big driver, isn’t it? And more so for Canada than anywhere,” said Chris King, portfolio manager at Morgan, Meighen and Associates. “In many ways, the two most important drivers of global growth (China and the U.S.) are certainly trending with a positive bias to growth. And Europe will still present some headline risk but they matter less and less compared to the two engines of growth.”
The base-metals sector gained 1.9% as March copper on the New York Mercantile Exchange advanced four cents to US$3.71 a pound. China is the world’s biggest consumer of the metal. Capstone Mining Corp. advanced 26¢, or 10.2%, to $2.82 on heavy volume of 10 million shares as fourth-quarter and full-year production met earlier guidance. Teck Resources Ltd. ran up 87¢ to $37.73.
Gold prices also climbed with the February contract up $22.50 to US$1,678 an ounce, pushing the gold sector ahead about 2.2%.