TSX closes up: financials claw back losses, miners benefit from Chinese data

TORONTO - The Toronto stock market closed higher Monday as investors bought up battered gold miners along with financial stocks that slipped last week in the wake of earnings reports from the big banks.

The S&P/TSX composite index gained 32.06 points to 13,312.78, also supported by base metal miners that benefited from Chinese trade data.

The Canadian dollar closed up 0.19 of a cent to 94.03 cents US amid a weak housing report.

Canada Mortgage and Housing Corp. said that housing starts came in at an annualized rate of 192,235 units in November, a decrease from 198,161 in October. It was also less than the 195,000 reading that economists had expected.

U.S. indexes were little changed after surging at the end of last week on a strong slate of economic data , capped off by U.S. data showing strong job growth last month.

The Dow Jones industrials were 5.33 points higher to 16,025.53, the Nasdaq gained 6.23 points to 4,068.75 and the S&P 500 index was up 3.28 points to 1,808.37.

While the data was a welcome sign that the American economic revival remains on track, it also raised concerns that the Federal Reserve is prepared to start winding up its asset buying program sooner than thought, perhaps as early as next week when Fed members meet.

"We saw the markets really drifting lower throughout the week on this premise that the economic data was looking good enough to maybe necessitate a Fed move earlier than expected," said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis.

"Then we get good news on Friday (which) had all the makings of the ’good news is bad news’ scenario but I think we saw a bit of transition where investors were embracing good news a bit more."

Speculation about tapering those US$85 billion of bond purchases has weighed on markets as the stimulus has kept long-term rates low and supported a strong rally on equity markets this year.

The gold sector ran ahead about two per cent while February gold added $5.20 to US$1,234.20 an ounce. Barrick Gold. (TSX:ABX) advanced 63 cents to C$17.01.

Guyana Goldfields Inc. (TSX:GUY) has revised up the total capital cost of its Aurora Gold project to US$249 million and approved a spending plan to bring it to commercial production. However, the new estimate is well below an earlier estimate, after the company scaled back its plans earlier this year. Guyana shares were ahead four cents to $1.64.

The base metals component strengthened, rising 0.67 per cent with March copper up a penny at US$3.26 a pound as China posted its biggest trade surplus in almost five years, rising to US$33.8 billion from $31.1 billion the month before. Exports ran ahead 12.7 per cent from November last year, well ahead of October's 5.6 per cent growth. But imports grew only by 5.3 per cent year-over-year amid tepid domestic demand.

First Quantum Minerals (TSX:FM) climbed 35 cents to C$17.55.

The financials sector was 0.4 ahead per cent, clawing back some of last week's 1.6 per cent decline following a mixed earnings performance from the big banks. Fehr said despite a couple of disappointments, the banks are attractive because "they’re able to offset that by some other levers that they can pull within their diversified earnings mix."

Royal Bank (TSX:RY) gained 70 cents to $69.75.

The energy sector was ahead 0.2 per cent with oil prices lower following a string of gains last week amid figures showing bigger than expected drawdowns in U.S. inventories. The January crude contract on the New York Mercantile Exchange edged 31 cents lower to US$97.34 a barrel. Canadian Natural Resources (TSX:CNQ) improved by 38 cents to $34.58.

Equal Energy Ltd. (TSX:EQU) says it's entered into a definitive agreement to be bought up by Petroflow Energy Corporation and Petroflow Canada Acquisition Corp. for $5.43 a share. Equal says the total transaction value is about US$230 million. Equal shares were one cent lower at $5.73.

The tech sector was the weakest component with shares in BlackBerry (TSX:BB) down 16 cents to $6.11, its lowest level in at least 10 years and down dramatically from its 52-week high of $18.49.

In other corporate developments, Bell Media (TSX:BCE) and the National Football League have announced a multi-year extension of their broadcast partnership that will see more NFL games on more Bell Media channels. Bell will have digital media rights that will give Canadian fans the ability to watch NFL games and content on Bell Media TV Everywhere platforms. Terms of the agreement weren't released and BCE shares gained 24 cents to $46.80.