The Toronto stock market started 2012 trading with a solid advance as commodity prices rose in the wake of strong manufacturing data, while oil prices got extra lift from rising tensions between Western nations and Iran.
The S&P/TSX Composite leaped 253.92 points, or 2.1%, to close the year’s first session at 12,208.43
The Canadian dollar bolted upward 0.77 cents to 98.92 cents U.S.
Worries about a slowing global economy and a worsening euro-zone government debt crisis pushed the TSX down 11% last year.
Analysts say Europe will continue to pressure markets in the absence of a convincing mechanism to deal with the crisis.
This week, both France and Germany will be tapping bond markets in what will be fairly significant tests of market confidence.
Oil prices jumped over $3 U.S. after Iran test-fired a surface-to-surface cruise missile Monday, part of 10-day naval manoeuvres scheduled to end Tuesday. Iran has threatened to close the Strait of Hormuz, where one-sixth of global crude exports pass, as possible retaliation to new U.S. economic sanctions over Iran’s nuclear program.
The February crude contract on the New York Mercantile Exchange ran ahead sending the TSX energy sector up. Canadian Natural Resources climbed $1.67 to $39.82 while Cenovus Energy climbed 97 cents to $34.80.
The base metals sector jumped as copper prices also advanced following the Chinese data. Copper is viewed as a key economic barometer because it is widely used in infrastructure projects and consumer products and China is the biggest buyer of the metal.
The March contract in New York gained eight cents to $3.52 U.S. Teck Resources advanced $2.46 to $38.37 while Ivanhoe Mines moved up 79 cents to $18.88.
The gold sector gained muscle as a weak U.S. dollar helped push bullion. Goldcorp Inc. was up 77 cents to $45.98 while Kinross Gold Corp. gained 79 cents to $12.42.
The financials sector was up as Manulife Financial rose 35 cents to $11.20 and CIBC climbed $1.28 to $75.07.
The consumer staples group was one of two decliners as convenience store owner Alimentation Couche-Tard declined $1.00 to $30.70 while grocer Loblaw Cos. shed 12 cents to $38.36.
In corporate developments, shares in Research In Motion Ltd. charged ahead 91 cents or 6.2% to $15.71. The jump came amid reports that Barbara Stymiest, an independent director who joined RIM’s board in 2007, is believed to be the leading candidate to replace Jim Balsillie and Mike Lazaridis as chair of the smartphone maker.
RIM has been under intense pressure from a group of shareholders to change the corporate leadership in the wake of a plunging share price because of missed profit estimates and delayed product launches.
In corporate developments, Athabasca Oil Sands Corp. stock rose 12 cents to $12.61 as it exercised an option to sell its remaining 40% interest in the MacKay River oilsands project to a unit of Chinese oil giant PetroChina for about $680 million.
The deal gives PetroChina full ownership of MacKay River project, one of the newest of northern Alberta’s oilsands developments.
Vero Energy Inc. has agreed to sell some of its natural gas assets for $209 million to pay off debt and refocus on light oil drilling. Its shares surged 57 cents or 27.4% to $2.65.
ON BAYSTREET
The TSX Venture Exchange gained 21.62 points to 1,506.28, while the Nasdaq Canada index added 12.95 points to 384.29.
All but two of the 14 Toronto subgroups were ahead, led by global base metals, up 5.4%, metals and mining, ahead 5%, and materials, gaining 4.3%.
The two laggards were telecoms and consumer staples, each off 0.3%.
ON WALLSTREET
In New York, stocks rallied Tuesday, kicking off the New Year on a high note, as investors welcomed upbeat reports on economic activity around the world.
The Dow Jones Industrials jumped 179.82 points, or 1.5%, to close at 12,397.40.
The S&P 500 soared 19.46 points to 1,277.06, while the Nasdaq Composite ticked 43.57 points higher to 2,648.72.
The gains came after reports on manufacturing growth in China and India came in better than expected over the weekend. On Tuesday, a report showed U.S. manufacturing activity expanded at a faster rate in December.
Bank stocks, which were among the worst performing sectors last year, led the Dow higher. Bank of America, Citigroup and JPMorgan all posted strong gains.
Industrial names Caterpillar and Alcoa were also higher, as were multinationals such as GE, Microsoft and 3M
Chesapeake Energy shares rose after the Oklahoma City-based energy company announced it completed a venture with an affiliate of French oil company Total that gives the French firm a 25% stake in more than 600,000 acres in eastern Ohio, an area rich in shale oil.
Mead Johnson Nutrition shares gained after two U.S. government agencies said they have completed their investigation of Enfamil and found the baby formula safe to use. The Food and Drug Administration and the Centers for Disease Control and Prevention had stepped in after a newborn baby died of a rare bacterial infection that they suspected could be linked to the powder-based infant formula.
Over the weekend, the Chinese government released its official reading on manufacturing activity, showing the sector expanded slightly in December, after contracting the month before.
And on Monday, a report compiled by HSBC and Markit showed India's manufacturing activity picked up significantly during the month.
Economically speaking, U.S. Institute for Supply Management said its survey for December showed the manufacturing index expanding more than expected, coming in at 53.9, better than the expected reading of 53 and higher than the 52.7 reading registered in November.
The U.S. Commerce Department said construction spending jumped 1.2% in November, after a revised 0.2% decline in October. Analysts surveyed by Briefing.com expect construction spending to have risen by 0.5%.
Treasury prices for the 10-year note fell sharply, driving the yields up to 1.96% from 1.87% late Friday. Treasury prices and yields move in opposite directions.
Oil for February delivery gathered $4.17 to $103.05 U.S. a barrel.
Gold futures for February delivery rose $33.70 to end at $1,600.50 U.S. an ounce.
