CANADA STOCKS-Energy, gold shares lift TSX as commodity prices rise

Mon Apr 22, 2013 10:17pm BST

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* TSX rises 25.13 points, or 0.21 percent, to 12,090.68
    * Five of 10 main index sectors decline
    * CN Rail profit hurt by weather; stock slips

    By John Tilak
    TORONTO, April 22 (Reuters) - Canada's main stock index
advanced for a third straight session on Monday as strength in
commodity prices lifted gold-mining and oil and gas shares.
    The gains were capped by declines in financial stocks and in
Canadian National Railway Co after it reported a drop
in first-quarter profit.
    The index was edging up from its second-biggest weekly
decline of the year, which was triggered by a rout in commodity
prices, including the biggest drop in gold prices ever. 
    "There's certainly an interest from investors at these
levels," said Elvis Picardo, strategist and vice president of
research at Global Securities in Vancouver.  "One can make the
argument that valuations are better than they've been in a
couple of years."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 25.13 points, or 0.21 percent, at 12,090.68.
Five of the 10 main sectors of the index were higher.
    The resource-heavy index is down 2.8 percent on the year so
far, in contrast to solid gains made by U.S. stocks.
    "Unquestionably, there is a degree of caution," said John
Ing, president of Maison Placements Canada. "A great many
portfolio managers are licking their wounds. This has been a
very dramatic correction on the resources."
    Higher oil prices supported a 1.2 percent climb in energy
shares on Monday. Among them, Suncor Energy Inc 
jumped 1.7 percent to C$28.60 and played the biggest role of any
single stock in leading the market higher.
    Monday's jump in shares of gold miners, following a
more-than 2 percent gain in the price of the precious metal,
helped boost the index's materials group, which rose 1.4
percent. 
    Investors are buying gold because of lower prices following
the sharp selloff last week, Ing said. "The gold correction was
overdone. So we're getting the inevitable bounce."
     Goldcorp Inc added 2.6 percent to C$29.32 and
Eldorado Gold Corp was up 5.4 percent at C$7.62.
    Gold-mining shares are down about 35 percent since the start
of the year.
    Global's Picardo said gold stocks could do well in the long
term. "It's one of those times when investors tend to be spooked
by short- to medium-term actions."
    Financials, the index's most heavily weighted sector, fell
0.5 percent. Royal Bank of Canada slipped 0.8 percent to
C$60.97 and was the biggest single negative influence on the
index.
    Operations at CN Rail took a hit from harsh winter weather
in Western Canada, which slowed operations and pulled down
profit. Shares of the railway declined 0.9 percent to C$97.64.
 
    As the Canadian first-quarter earnings season gets underway,
several analysts told Reuters that results are expected to be
lackluster, but that recently lowered expectations could provide
a market upside.
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