CANADA STOCKS-Safeway deal helps TSX bounce strongly from 7-wk low

Thu Jun 13, 2013 5:33pm EDT

* TSX up 167.24 points, or 1.38 percent, at 12,277.13
    * All 10 main index sectors advance
    * Index hits seven-week low in early trading
    * Empire Co rises 10.6 percent on Safeway takeover plan
    * Royal Bank biggest positive influence on index

    By Peter N Henderson
    TORONTO, June 13 (Reuters) - Canada's main stock index
rebounded on Thursday following two sessions of steep losses,
helped by a jump in Empire Co Ltd after the company
said it will buy Safeway Inc's Canadian assets for $5.7
billion.
    Shares of Empire, the operator of grocery chain Sobeys,
jumped nearly 10.6 percent after investors and analysts cheered
the move, which will nearly double the company's reach in
Western Canada. 
    The Toronto market also received a lift from
stronger-than-expected U.S. jobless claims and retail sales
data, which also boosted Wall Street. The U.S. economy is the
biggest destination for Canadian exports. 
    The TSX had opened lower, tracking a global equities selloff
over the past week based on worries that major central banks
might start dialing back their monetary stimulus programs, and
hit a seven-week low before recovering.
    "The market has really been oversold over the past couple of
weeks," said David Kunselman, senior funds manager at Excel
Funds Management. "Right now it looks like you're getting a
bounceback. People are seeing a little bit of opportunity."
    The Toronto Stock Exchange's S&P/TSX composite index
 ended the day up 167.24 points, or 1.38 percent, at
12,277.13. All 10 of the index's subgroups were firmer.
    "If the Fed does start tapering, they're going to be doing
it because of job growth and economic growth is much stronger,"
said Robert Kavcic, a senior economist at BMO Capital Markets.
"That might spook equity investors in the near term but in the
longer term it will actually be supportive."
    The financials sector, the index's most heavily weighted,
was up a market-leading 1.56 percent. In the group, Royal Bank
of Canada rose 2.59 percent to C$60.56 and played the biggest
role of any single stock in boosting the index.
    Energy stocks rose 1 percent as the U.S. data boosted oil
prices. 
    Among top percentage gainers was Niko Resources. It rose 9.3
percent to C$8.32 after the company announced its proven
reserves of oil and gas have increased by 160 percent, and said
a recent gas discovery off the coast of India could add
significantly to future reserves. 
    Alacer Gold had the biggest percentage gain of any
stock in the index. It rose nearly 11.7 percent to C$2.58 after
the company said it was looking to sell its Australian assets to
focus on mining and exploration in Turkey. 
    Empire's jump helped the consumer staples sector gain 2.3
percent. Some other retailers in the group also made gains.
Loblaw Companies Ltd was up 3.9 percent at C$48.29, and
Alimentation Couche-Tard was up 3.7 percent at
C$59.11.
    The information technology group added nearly 2.9 percent,
with smartphone maker BlackBerry climbing almost 6
percent to C$14.70 following a brokerage upgrade.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

Where do you want to go?

We look at when to take trips, budget considerations and the popularity of multigenerational family travel.   Video