TSX advances, commodities rise

TORONTO - Resource stocks powered the Toronto stock market higher Thursday as prices for oil and copper ran ahead in the wake of strong Chinese trade data.

The S&P/TSX composite index climbed 35.58 points to 12,557.82 while the TSX Venture Exchange was ahead 9.44 points to 1,238.55.

The Canadian dollar rose 0.14 of a cent to 101.39 cents US.

U.S. markets also advanced as data showed that China's export growth more than quadrupled in December from the previous month to 14.1 per cent while imports rose six per cent after no growth in November.

China's trade surplus unexpectedly surged to $31.6 billion in the month, leaving the 2012 total at $232 billion, the widest since 2008.

The Dow Jones industrials gained 43.31 points to 13,433.82, the Nasdaq was 14.99 points higher to 3,120.81 while the S&P 500 index rose 6.13 points to 1,467.15.

The trade figures are good news since they indicate that China is gradually emerging from its worst economic downturn since the 2008 global crisis. Factory output and other activity also improved in the final quarter of 2012, but analysts say a recovery is still shaky for the world's second-largest economy.

The World Bank and private sector forecasters expect growth of about eight per cent in 2012 and about 7.5 per cent this year. That would be stronger than the West and Japan but China’s weakest performance since the 1990s.

Hopes for higher demand pushed commodity prices higher. Strong demand for commodities from China in the past has pushed prices for oil and metals higher and also supported energy and mining stocks on the resource-intensive TSX.

The base metals sector gained 0.85 per cent as March copper on the New York Mercantile Exchange advanced three cents to US$3.70 a pound. China is the world's biggest consumer of the metal. Lundin Mining (TSX:LUN) ran up 10 cents to C$5.20 while First Quantum Minerals (TSX:FM) improved by 35 cents to $20.94.

Gold prices also climbed with the February contract up $13.50 to US$1,669 an ounce, pushing the gold sector ahead 1.4 per cent. Goldcorp Inc. (TSX:G) climbed 63 cents to C$36.05 while Iamgold Inc. (TSX:IMG) gained 20 cents to $10.73.

The energy sector was ahead 0.2 per cent while the February crude contract gained $1.09 to US$94.19 a barrel. Suncor Energy (TSX:SU) was 25 cents higher to $33.52.

Bonavista Energy Corp. (TSX:BNP) shares fell 66 cents or 4.69 per cent to $13.42 after it said it is sharply cutting its monthly dividend, saying commodity prices are too low to sustain the current payout. Bonavista plans to cut the monthly dividend to seven cents a share from 12 cents.

The information technology sector gained 0.5 per cent with Research In Motion Ltd. (TSX:RIM) ahead eight cents to $11.48.

Shares in technology company Sandvine Corp. (TSX:SVC) surged 16 per cent to $1.80 as it said revenue hit US$27.5 million in the fourth quarter, up 26 per cent from a year earlier and $4 million above analyst estimates. The company, which reports in U.S. currency, had $6.5 million or 4.6 cents per share of net income. Sandvine’s technology is designed to help operate communications networks efficiently.

Elsewhere in the sector, MacDonald, Dettwiler and Associates Ltd. (TSX:MDA) shares edged up 10 cents to $60.30 as it secured a $706-million deal with the Canadian Space Agency for the construction of three satellites. The contract will lead to the completion of construction, the launch of the satellites planned for 2018 and the first year of operation of the satellite system.

Traders also focused on earnings this week now that the U.S. fiscal crisis has briefly faded to the background.

Alcoa Inc. kicked off the fourth-quarter corporate earnings season Tuesday with a positive earnings report and outlook.

Astral Media Inc. (TSX:ACM.A) says its first-quarter profit was $59.6 million or $1.05 per share, beating analyst estimates. Revenue rose to $274.5 million, which was about $3 million below analyst estimates but higher than a year before. The company has a friendly deal with BCE Inc. (TSX:BCE), which is seeking regulatory approval to buy Astral for about $3.38 billion. Astral edged up 14 cents to $47.04.

Canadian pharmaceutical chain Jean Coutu Group (TSX:PJC.A) on Thursday reported stronger sales and a quarterly profit that beat analyst estimates by a penny per share.

Net profit was $56.2 million or 26 cents per share while revenue was $716.6 million, up $16.5 million from a year earlier, which was in line with analyst estimates compiled by Thomson Reuters and its shares advanced 25 cents to $14.47.

European bourses were mainly higher as the Bank of England left its base interest rate and its monetary stimulus program unchanged at 0.5 per cent, where it has been since March 2009.

The European Central Bank said it was keeping its key rate unchanged at 0.75 per cent for the 17-country eurozone despite the weak economy.

London's FTSE 100 index ahead 0.11 per cent, Frankfurt's DAX was ahead 0.26 per cent while the Paris CAC 40 dipped 0.11 per cent.

Earlier in Asia, Japan’s Nikkei 225 index rose 0.7 per cent, South Korea’s Kospi added 0.8 per cent, Australia’s S&P/ASX 200 advanced 0.3 per cent and benchmarks in Singapore, Taiwan and New Zealand also rose.

Hong Kong’s Hang Seng gained 0.6 per cent following a decision by the China Securities Regulatory Commission to allow some initial public offerings of mainland companies to be carried out in Hong Kong.