Toronto's main stock index closed higher on Friday, lifted by solid gains in its heavyweight resource groups as key commodity prices advanced. Oil prices rose on news of new limits on oil shipments on a Canadian export pipeline and as a European bank stress test produced positive results, which offset a rash of weak US economic data.
TransCanada Corp said it will cut nominated crude volumes on its Keystone pipeline to the United States from Canada by 20 percent next month as it work to maintain the line following two spills in May. TransCanada rose 1 percent to C$40.43. Other top gainers were mostly from the energy and materials groups. Suncor Energy rose 1.09 percent to C$38.01, while Teck Resources jumped 2.46 percent to C$49.90. Talisman Energy advanced 3.1 percent to C$18.61.
"The underlying strength in the basic commodities is reflecting the fact that perceptions are not as dark as they were a day or two ago. So we're seeing a bit of a swing back," said Michael Sprung, president of Sprung & Co Investment Counsel. "What the market today is telling you is at least nothing was too far off of expectations, at least not on the negative side. And that's almost relief in this kind of environment."
The Toronto Stock Exchange's S&P/TSX composite index finished up 46.62 points, or 0.35 percent, at 13,299.54. The gains were not enough to give the index a fourth straight week of advances. The index fell 0.5 percent on the week. Seven of its 10 main sectors were lower, but its two big resource-based groups rose. Oil and gas gained 1.36 percent, while materials headed up 0.7 percent.
The TSX rose as high as 13,337.24 during the session, buoyed by a stronger profit at US bank Citigroup, which offset persisting fears about US and European debt levels. In individual company news, Valeant Pharmaceuticals was another influential advancing issue, rising 3.74 percent to C$52.49. The speciality drugmaker said it would pay $345 million to buy the skincare unit of Johnson & Johnson-owned Janssen Pharmaceuticals.
The J&J deal follows Valeant's announcement earlier this week that it would acquire Sanofi's Dermik skincare business for $425 million. Canadian Imperial Bank of Commerce slipped 0.66 percent to C$74.13 after it said it will buy a 41 percent stake in a US asset manager from J.P. Morgan Chase & Co for $848 million in cash.
John Kurgan, a senior market strategist at Lind-Waldock, said his technical studies have indicated the TSX is likely to push higher from now on. "It's had every reason to sell off more. It really hasn't," he said. "If we get any resolution to the US debt ceiling. I think the stock market can go a lot higher in the States and in Canada."
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