Canada’s major stock index climbed 0.1%; the increase was led by energy stock and material as commodity prices came up on trusts that the U.S budget crisis might be avoided.
Republicans and Democrats on Sunday said that they are working on a deal to avoid the “fiscal cliff”, a combination of spending cuts and tax increases beginning early in 2013 unless there is an agreement on Capitol Hill.
Irwin Michael, ABC Funds portfolio manager, said that if the market feels some deal might be crafted, it will progress. He said that the market was letdown. If we obtain some good news, it will be mirrored in the stocks.
The Toronto Stock Exchange’s S&P/TSX combined index rose 1.08 percent or 128.08 points, at 12,005.80. The 10 main segments on the index were up.
Energy stocks were up by 1.67%, tracking high oil prices. Suncor Energy Inc stocks rose 3.65% at 32.69 and played a major role of any sole stock in heading the market higher.
Sid Mokhtari, the director of institutional equity research at CIBC World Markets and market technician said that as the energy sector grows, TSX does the same. He stated that the energy segment had fallen much since achieving highs in September.
Oil prices were up more than 2% due to the increasing aggression in the Middle East concerns on oil supplies. Goldcorp Inc rose 2.64% at C$40.77, and Barrick Gold Corp was up 1.33 % to C%34.22. That made the material groups that include mining stocks up by 1.87 percent. The fall in the dollar rate made gold price to rise by 1 percent.
Michael said that there is a disconnection between the regular shares of gold, gas, and oil companies when compared to the commodities of gas, oil, and gold. The market is extremely undervalued.
Agrium Inc share value rose 1.84 percent to C$99.61 following the launching of a proxy battle by its major shareholder Jana Partners. It named nominees to the board of Agrium.
The financial segment, which is the biggest on the index rose by 0.82 percent. Royal Bank of Canada increased by 1.60% at C$56.51 and the Bank of Nova Scotia stocks rose 0.74% to C$53.40.
Astral Media Inc shares climbed up by 3.15 percent when Canada’s major telecom supplier, BCE Inc revealed that it might get a regulatory sanction for an altered C$3 billion program to take over Astral Media Inc.