The Toronto stock market was higher Tuesday as investors largely brushed off the latest move by China’s central bank to raise interest rates in a bid to dampen high inflation.
The S&P/TSX composite index ended the day ahead 80.59 points to 13,892.52
The Canadian dollar was down 0.40 cents to 100.5 cents U.S.
The energy sector was off as Imperial Oil fell 39 cents to $44.19 and EnCana Corp. dropped 35 cents to $31.28.
The March copper contract on the Nymex was unchanged at $4.58 U.S., the record high the metal reached last Friday. The base metals sector was up as Teck Resources moved ahead $1.09 to $63.19 ahead of the release of its quarterly earnings later in the day while Equinox Minerals rose 14 cents to $6.79.
Gold prices moved higher with Barrick Gold Corp. surging $1.17 to $48.45 while Goldcorp Inc. improved by $1.96 to $42.76.
In other corporate news, aerospace parts maker Heroux-Devtek Inc. says it has signed a $175-million, seven-year contract with Bombardier to make structural parts for all of the company’s planes. Its shares jumped 56 cents to $8.18.
Silvermex Resources Inc. shares gained five cents to 90 cents as it said that its market capitalization grew 800% in fiscal 2010 from $24.5 million to $195 million. The company says it has set aside $13.4 million to develop its La Guitarra silver mine in Mexico.
The People’s Bank of China announced Tuesday that the benchmark one-year deposit rate would rise by a quarter percentage point to 3% and the one-year lending rate would increase by the same amount to 6.06%
It was the second move to tighten rates in just over a month.
Chinese Inflation jumped to a 28-month high of 5.1% last November before moderating in December, but it has worried leaders who fear that a sharp rise in living costs could trigger unrest.
China has made other moves to tackle inflation over the last year, such as ordering banks to raise the amount of money they must keep on reserve.
Past moves by China to slow its economy have usually affected commodity prices in the short term and Tuesday’s move was no exception as concerns over lower demand depressed prices for oil and copper.
ON BAYSTREET
The TSX Venture Exchange recovered 5.85 points to 2,380.88, while the Nasdaq Canada index gained 6.19 points to 791.56.
In Toronto, 10 of the 14 subgroups were positive, led by gold, up 2.9%, materials, ahead 1.8%, and information technology, 1.6% stronger.
The four laggards were weighed by telecoms and energy, down 0.3% each, and utilities, sliding 0.2%.
ON WALLSTREET
In New York, stocks closed higher Tuesday for the seventh straight day as bullish traders cheered news in the consumer sector and looked past China's latest interest rate hike.
The Dow Jones Industrials added 71.52 points to conclude at 12,233.20.
The S&P 500 index gained 5.52 points to 1,324.57. The tech-rich Nasdaq Composite Index acquired 13.06 points to 2,784.65.
The blue chips were led higher by shares of McDonald's which climbed 3% after the fast food giant reported better-than-expected January same-store sales. Other consumer discretionary names in the S&P 500 such as Colgate Palmolive, Urban Outfitters and JCPenney were all solidly higher as well.
Meanwhile big-cap technology stocks posted slight declines, after analysts at Goldman Sachs sliced their PC sales forecast. Shares of Cisco Intel and Hewlett-Packard were down around 0.6% each.
Avon Products shares fell more than 4.5% after the company reported a 15% decline in quarterly earnings, missing estimates.
Kindred Healthcare shares jumped more than 40% after it received a $900-million U.S. buyout offer from competitor RehabCare Group
Toyota issued an upbeat financial forecast with three months left in the fiscal year, but the automaker said sales were sluggish in the third quarter.
Toyota said net income fell to $1.1 billion U.S. from $1.87 billion U.S., a 38.9% drop compared to the third quarter of last year. Shares were up 4.5% on the news.
Later Tuesday, the U.S. government is expected to announce the results of a 10-month inquiry into possible causes of unintended acceleration in Toyota cars and trucks.
The price on the benchmark 10-year U.S. Treasury sagged a bit, boosting the yield to 3.72% from 3.64% Monday. Treasury prices and yields move in opposite directions.
Oil for February delivery slipped 29 cents to $87.15 U.S. a barrel.
Gold futures for April delivery rose $19.80 to $1,368 U.S. an ounce.
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