CANADA STOCKS-TSX closes near 10-1/2-month highs; Shoppers slide

Fri Jan 18, 2013 5:07pm EST

* TSX up 50.96 points, or 0.40 percent, to 12,725.69
    * Nine of the main index sectors higher
    * RIM up 7 percent, tech group up 2.23 pct
    * Shoppers Drug Mart slide 5.19 pct on cost cap for generic
drugs

    By Solarina Ho
    TORONTO, Jan 18 (Reuters) - Canada's main stock index
finished near 10-1/2-month highs on Friday, with financial
stocks and Research in Motion Ltd shares leading the
market higher.
    A combination of recent positive Chinese and North American
economic data, decent earnings results, acquisition deals, low
volatility and muted volumes have all contributed to positive
investor sentiment, analysts said.
    "The market's been grinding higher. All in all, the big
sector weights are generally positive," said Paul Hand, managing
director at RBC Capital Markets, referring to the influential
financial, material and energy sectors, which were up 0.59
percent, 0.08 percent, and 0.45 percent respectively. Combined,
they make up roughly 75 percent of the market.
    "The market's getting increasingly immune to the bad news.
The boy who cried wolf -- by the 48th time, you sort of start to
ignore it," he added.
    Overnight news that China's economy grew at a slightly
faster-than-expected rate in the fourth quarter helped boost
materials and energy shares. The report was the latest
indication that China, a major resource consumer, is recovering
from a slowdown.   
    "The Chinese number yesterday was the key driving force, I
think ... obviously people are a bit more optimistic on the
resource side. That certainly helps, especially with things like
copper," said Sal Masionis, stockbroker at Brant Securities.
    Oil firm Canadian Natural Resources Ltd closed 2.11
percent higher to C$29.95, while Bank of Nova Scotia 
finished up 0.77, at C$57.86. Royal Bank of Canada added
0.49 percent to C$61.74 to round off the top three most
influential stocks.
    The technology group gained 2.23 percent, bolstered by RIM
stock which rose 7.02 percent to C$15.71. Jefferies & Co analyst
Peter Misek lifted his stock rating on RIM to "buy" from "hold",
adding to optimism about the make-or-break launch on Jan. 30 of
a line of smartphones powered by the company's new BlackBerry 10
software. 
    "It's a very, very tricky situation ... There's an awful lot
of rumors going out about it, but I think it's going to be a
very, very tough uphill battle (for RIM)," Masionis said.
    The Toronto Stock Exchange's S&P/TSX composite index
 climbed 50.96 points, or 0.40 percent, to 12,725.69.
Friday's intraday high of 12,751.16 was its strongest
performance since Feb. 29, 2012. The index has climbed about 1
percent this week.
    It has only retreated three sessions since the start of the
year and has added about 2.35 percent during that period.
    Nine of the index's main sectors were higher, with consumer
staples the lone decliner, retreating 1.2 percent. 
    Consumer staple Shoppers Drug Mart Corp was the
biggest drag on the index, slumping 5.19 percent to C$41.83
following news that Canadian provinces have agreed to new price
caps on six generic drugs in what could be the start of a
coordinated effort to clamp down on costs.