Toronto stock market advances; commodities rise on strong Chinese trade data

TORONTO – The Toronto stock market registered a solid gain Thursday, led by mining stocks as strong Chinese trade data pushed prices for oil and copper higher.

The S&P/TSX composite index climbed 77.5 points to 12,599.74 while the TSX Venture Exchange was ahead 10.97 points at 1,240.08.

The Canadian dollar rose 0.32 of a cent to 101.57 cents US.

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

In New York, the Dow Jones industrials was up 80.71 points at 13,471.22, the Nasdaq was 15.95 points higher at 3,121.76 and the S&P 500 index added 11.1 points to a fresh, five-year high of 1,472.12.

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 up commodity prices. 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.

“It’s the big driver, isn’t it? And more so for Canada than anywhere,” said Chris King, portfolio manager at Morgan, Meighen and Associates.

“In many ways, the two most important drivers of global growth (China and the U.S.) are certainly trending with a positive bias to growth. And Europe will still present some headline risk but they matter less and less compared to the two engines of growth.”

The base metals sector gained 1.91 per cent as March copper on the New York Mercantile Exchange advanced four cents to US$3.71 a pound. China is the world’s biggest consumer of the metal. Capstone Mining (TSX:CS) advanced 26 cents or 10.16 per cent to C$2.82 on heavy volume of 10 million shares as fourth-quarter and full-year production met earlier guidance. Teck Resources (TSX:TCK.B) ran up 87 cents to $37.73.

Gold prices also climbed with the February contract up $22.50 to US$1,678 an ounce, pushing the gold sector ahead about 2.2 per cent. Goldcorp Inc. (TSX:G) climbed $1.26 to C$36.68 while Iamgold Inc. (TSX:IMG) gained 20 cents to $10.73.

The energy sector was ahead 0.44 per cent while the February crude contract gained 72 cents to US$93.82 after earlier hitting a three-month high of US$94.70 a barrel. Prices also got a boost from a report that Saudi Arabia cut its crude production by nearly five per cent last month to the lowest level in 19 months.

Suncor Energy (TSX:SU) was 31 cents higher at C$33.58 while Canadian Natural Resources (TSX:CNQ) advanced 51 cents to $26.69.

The information technology sector gained 1.4 per cent with Research In Motion Ltd. (TSX:RIM) ahead 39 cents to $11.79.

The rise came after executives at three of the top U.S. cellphone carriers — Verizon Communications, AT&T Inc and T-Mobile USA — said that they would support RIM’s new BlackBerry 10 products, which are to be launched Jan. 30.

Shares in technology company Sandvine Corp. (TSX:SVC) surged 9.68 per cent to $1.70 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.

The industrials sector also made headway as Bombardier Inc. (TSX:BBD.B) said improved debt markets will allow the transportation giant to raise US$2 billion. That word came nearly two months after it was forced to delay its money-raising effort aimed at helping to fund a string of development programs led by the CSeries airplane. Its shares were up nine cents to $3.99.

Optimism over the fourth-quarter earnings season also helped drive up indexes 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.

On Friday, traders will concentrate on the financial sector with bank Wells Fargo set to report earnings. Analysts look for earnings per share of 89 cents, up from 73 cents a year ago.

In Canada, Astral Media Inc. (TSX:ACM.A) said Thursday that 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 31 cents to $47.21.

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 and its shares advanced 35 cents to $14.57.