CANADA STOCKS-Data lifts TSX to 1-month high as golds surge

Wed May 8, 2013 5:09pm EDT

* TSX rises 120.94 points, or 0.97 percent, at 12,585.05
    * Six of 10 main sectors advance
    * Tim Hortons down after naming new CEO, posts profit drop

    By John Tilak
    TORONTO, May 8 (Reuters) - Canada's main stock index jumped
almost 1 percent on Wednesday, hitting a one-month high, after
strong economic data in China and Germany buoyed hopes for a
global economic recovery and boosted the shares of gold
producers.
    Gold shares jumped nearly 6 percent on the back of higher
bullion prices, driven by a weaker dollar and robust physical
demand. Miner Barrick Gold Corp rose more than 8
percent and rival Goldcorp Inc added more than 6 percent.
    China's exports and imports grew more than expected in
April, offering the possibility of a better outlook for the
world's second-largest economy, while German industrial output
unexpectedly jumped in March.  
    The resource-sensitive Toronto index's sharp reactions to
developments in China, a big consumer of commodities from
Canada, stem from its large exposure to materials and energy
stocks. 
    The market's gains extended into a fifth straight session.
The TSX has risen 1.2 percent on the year, recovering from a
massive commodity-led selloff last month while still trailing
growth at major indices like the S&P 500. 
    "Equities are benefiting from a 'Goldilocks environment',"
said Stan Wong, vice president and portfolio manager at
Macquarie Private Wealth.
    "The economies are not too hot to stop the monetary easing
policies of the central banks and not too cold to cause
corporate earnings to slip into negative territory."
    Earlier this week, major central banks indicated their
support of growth-oriented policies.
    "Global central banks stimulus continues to be the major
driver for all asset markets," said Fergal Smith, managing
market strategist at Action Economics.
     The Toronto Stock Exchange's S&P/TSX composite index
 closed up 120.94 points, or 0.97 percent, at
12,585.05, close to its highest point since April 3.
     Six of the 10 main sectors on the index were higher. 
     The materials sector, which includes mining stocks, rose
4.5 percent, helped by higher gold shares. 
    "We're seeing a reflex bounce from the capitulation several
weeks ago," Wong said, referring to strength in gold shares and
the price of the commodity. "We'll probably not see much more
than that."   
    Smith said "the technical backdrop for gold itself has
deteriorated and that will take some time to work its way up." 
    Energy shares rose 0.6 percent and financials, the index's
most heavily weighted sector, gained 0.4 percent.
    In company news, Tim Hortons Inc named a new chief
executive and reported a 3 percent fall in first-quarter profit.
The stock lost 2.6 percent to C$57.13. 
    Quebecor Inc fell nearly 3.4 percent after the
media and telecommunications company's first-quarter profit
halved due to higher costs, a sharp drop in media revenue and
lower gains on financial instruments.
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