The Toronto stock market was higher Monday as traders juggled data showing the Chinese economy likely heading for a soft landing while the euro-zone seems to be sliding into recession.
The S&P/TSX Composite Index approached noon higher by 131.11 points, or 1.1%, to 12,523.09
The Canadian dollar also marched ahead 0.41 cents to 100.82 cents U.S.
Meanwhile, the Chinese government announced that its official purchasing managers’ index, a gauge of business activity, rose 2.1 points to 53.1, the highest in almost a year.
However, HSBC’s manufacturing PMI for China, although revised slightly upward to 48.3 from 48.1, still came in below 50 -- which signals contraction -- for the fifth month in a row.
China’s growing economy has been a major source of support for a global economy still recovering from the 2008 financial crisis and recession. Its huge appetite for commodities has driven oil and metal prices higher and supported resource stocks on the TSX.
However, the Toronto market is up only 3.65% year to date, lagging behind other markets as the resource-intensive TSX reacts to China’s slowing economy and worsening conditions in Europe.
The base metals sector was up as optimism about China helped push the May copper contract on the New York Mercantile Exchange up three cents to $3.85 U.S. a pound. China is the world’s biggest consumer of the metal, often viewed as an economic bellwether as it is used in so many applications. Teck Resources declined 25 cents to $35.36.
Ivanhoe Mines shares were up as the Vancouver based miner said it was selling its stake of approximately 58% in Mongolian coal miner SouthGobi Resources Ltd. to Aluminum Corporation of China Ltd. for $889 million.
Ivanhoe says it plans to use the proceeds from the sale to fund the continued development of its flagship Oyu Tolgoi copper, gold and silver mine in southern Mongolia and its shares gained 26 cents to $15.95.
The TSX energy sector edged up as Canadian Natural Resources gained 40 cents to 33.46.
Energy producer Nexen Inc. says exploratory drilling has confirmed the size of the Appomattox light oil discovery in the Gulf of Mexico. The company said Monday that Appomattox has the equivalent of between 120 million and 370 million barrels of oil. The company’s share would be one-fifth of that and Nexen shares added four cents to $18.33.
Encana Corp. said it will accelerate efforts to form partnerships for developing its oil and liquids-rich assets. The Calgary-based company announced no new partnerships but said it could apply the same partnership strategy it has used with its natural gas plays. EnCana shares improved by 17 cents to $19.76.
The gold sector was slightly higher as Barrick Gold Corp. rose 38 cents to $43.73.
The financial sector was the weakest group as TD Bank gave back 82 cents to $83.84.
In other corporate news, hedge fund Pershing Square, which is making a push for the replacement of Canadian Pacific’s top management, has named former Norfolk Southern vide-chairman Stephen Tobias to its slate of nominees to the railway’s board. Pershing Square, which has been locked in a bitter war of words with the top brass of Canada’s second-largest railway, holds a 14.2% share in Canadian Pacific.
CP shares shed 15 cents to $75.56.
ON BAYSTREET
The TSX Venture Exchange poked ahead 3.66 points to 1,570.05, while the Nasdaq Canada index gained 9.21 points to 420.57
All but two of the 14 Toronto subgroups remained positive by noon hour. Materials raced ahead 1.9%, while global base metals and the metals and mining group each climbed 1.7%.
The two laggards were information technology, off 1.1%, and health-care sliding 0.8%.
ON WALLSTREET
In New York, stocks posted very modest gains Monday, the first trading day of April, as investors look for reasons to sustain the recent rally.
The Dow Jones Industrials regained 67.47 points to break for lunch at 13,279.50.
The S&P 500 jumped 10.60 points to 1,419.07, and the Nasdaq sprang up 24.09 points to 3,115.66
Investors started the week and the second quarter with reams of U.S. and global economic data to parse through. Those reports paint decidedly mixed pictures of the health of the global economy.
Shares of cosmetics maker Avon Products spiked after competitor Coty announced that it had offered to acquire Avon for roughly $10 billion U.S. in cash.
Coty said in a statement that it had made "extensive but unsuccessful attempts to engage Avon in discussions regarding its proposal," and therefore decided to make the offer public in order to inform Avon shareholders. Coty added that it has no intention of pursuing a hostile takeover.
Credit card processor Global Payments continued to plunge, after falling 9% Friday on news that the company had fallen victim to a data breach, potentially compromising credit and debit card information from all of the major card brands, including Visa and MasterCard.
Shares of daily deals site Groupon were down more than 10% ahead, after the company announced Friday that it was revising its fourth-quarter income and sales lower due to a higher rate of customers seeking refunds.
On the economic slate, the March installment of the Institute for Supply Management
Manufacturing Index came in above expectations at 53.4, up from 52.4 in the month prior, according to a survey of analysts by Briefing.com.
February construction spending declined by 1.1%. Economists had predicted a 0.5% increase in spending.
The price on the benchmark 10-year U.S. Treasury surged, driving yields down to 2.18% from Friday’s 2.22%. Treasury prices and yields move in opposite directions.
Oil for May delivery moved $1.33 to $104.35 U.S. a barrel.
Gold futures for April delivery gained $12.50 to $1681.80 U.S. an ounce.
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