CANADA STOCKS-TSX gains as gold miners shine, Barrick jumps

Tue Dec 10, 2013 4:55pm EST

* TSX closes up 11.23 points, or 0.08 percent, at 13,324.01
    * Gold miners lead push as Barrick rises 5 pct
    * Narrowing crude spread helps Canadian oil companies

    By Alastair Sharp
    TORONTO, Dec 10 (Reuters) - Canada's main stock index eked
out a small gain on Tuesday, helped by a surge in major gold
miners as the price of bullion hit a three-week high, while bank
stocks wilted in the aftermath of an uninspiring earnings
season.
    Barrick Gold Corp jumped 5.3 percent to C$17.91,
outpacing gains in shares of its rivals, indicating that
investor sentiment around the miner has improved on the back of
its recent moves to address corporate governance concerns and
strengthen its balance sheet.
    "You've already seen some action by the new management at
Barrick which has been viewed favorably by the market," said
Gavin Graham, chief strategy officer at Integris Pension
Management Corp. 
    "Looking at this stock, it's probably as cheap as it's been
in relation to the price of gold in the last 20 years."
    Several other gold miners joined in the rise, with Goldcorp
Inc adding 3.3 percent to C$23.08 and Kinross Gold Corp
 gaining 5.4 percent to C$5.12, as investors scrambled to
cover earlier bets that the price of gold would fall.
    "It's encouraging to see gold and gold stocks are up quite
nicely," said Elvis Picardo, strategist and vice president of
research at Global Securities in Vancouver.
    "With a number of sections of the market looking fairly
valued or overvalued, it's logical to look at sectors that have
not moved," he said. "It's quite likely that gold stocks are
getting a second look at these levels."
    Gold miners are heavily represented on the Toronto Stock
Exchange's S&P/TSX composite index, which closed the
session up 11.23 points, or 0.08 percent, at 13,324.01.
    Meanwhile bank stocks were among the heaviest weights on the
index, with Royal Bank of Canada off 0.6 percent at
C$69.35 and Bank of Nova Scotia down 0.6 percent to
C$63.80. 
    Canada's five biggest banks all reported quarterly earnings
last week, with Canadian Imperial Bank of Commerce 
profit slipping and Toronto-Dominion Bank earnings
barely rising.
    "We saw less-than-spectacular earnings, they weren't a
disaster but investors haven't been used to flat year-on-year
earnings or even declines," said Craig Fehr, Canadian market
strategist at Edward Jones in St. Louis, Missouri.
    Energy companies Canadian Natural Resources 
and Suncor Energy Inc gained - 1.1 percent and 0.7
percent respectively - as a lessening of a supply glut helps to
shrink the discount applied to Canadian oil versus the WTI
standard.
    "We like both of those," Fehr said of CNR and Suncor. "If we
see a continued narrowing of the Canadian crude discount
relative to some of the sweet oils that would benefit them on
pricing."
    The broader resource sector that dominates Canadian equities
should gain from further evidence of a global economy recovery,
while Integris' Graham said stock prices in the gold sector
could grow another 40 or 50 percent if the price of gold rises
to $1,400 or $1,500 an ounce. It is currently trading at around
$1,260.
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