The Toronto stock market was higher Friday amid data showing the Canadian economy grew faster than expected during June and higher prices for oil and metals.
However, the strength of the day’s trading will hinge largely on market reception to a much-anticipated speech by U.S. Federal Reserve chairman Ben Bernanke and whether he signals another round of economic stimulus is in the works.
The S&P/TSX composite index gained 55.37 points to 11,942.02, while the TSX Venture Exchange was 4.01 points higher to 1,221.97.
The Canadian dollar rose 0.5 of a cent to 101.28 cents (U.S.) as Statistics Canada said gross domestic product increased by 0.2 per cent, against the 0.1 per cent rise that economists had expected. This translated into a 0.5 per cent gain for the second quarter with growth helped along by rising business investment.
The agency reported that GDP expanded at an annual rate of 1.8 per cent in the April-June period, slightly better than the 1.7 per cent pace recorded in the U.S.
U.S. markets also made solid advances, with the Dow Jones industrials up 110.65 points to 13,111.36.
The Nasdaq composite index climbed 17.89 points to 3,066.6 and the S&P 500 index ran up 9.51 points to 1,408.99.
Traders had been encouraged for much of August that signs of a slowing global economy in mid-summer indicated that central banks would step in with more stimulus to keep the recovery on track.
Bernanke’s speech is set to take place at 10 a.m. ET.
The TSX energy sector rose about one per cent as oil prices moved higher with the October crude contract on the New York Mercantile Exchange ahead $1.71 to $96.33 (U.S.) a barrel. Canadian Natural Resources was ahead 42 cents at C$30.29.
Kuwait’s state-owned petroleum company has reportedly signed a preliminary deal to invest as much as $4-billion in a joint venture with Athabasca Oil Corp. The Globe and Mail reported officials of Kuwait Petroleum Corp. have a memorandum of understanding for an investment to develop some of Athabasca’s oilsands properties in northern Alberta. Trading in Athabasca shares was halted before the open. The shares closed Thursday at $12.51.
The gold sector was up slightly while December bullion gained $6.80 to US$1,663.90 an ounce. Goldcorp Inc. was ahead 39 cents at $39.55.
Financials were also positive amid two well-received earnings reports.
National Bank of Canada reported after the close Thursday that quarterly profits grew by 13 per cent to $379-million. Adjusting for one-time items, it earned $353 million, or $1.98 per diluted share, up from $334-million and beating analyst estimates by eight cents. However, unlike the five big banks that also reported this week, National is not upping its dividend. Its shares were ahead eight cents at $75.20.
Canada’s five largest banks earned $7.8-billion in cumulative profits in the last quarter.
European bourses were higher as London’s FTSE 100 index gained 0.47 per cent, Frankfurt’s DAX was up 1.36 per cent and the Paris CAC 40 climbed 1.04 per cent.
Earlier, in Asia, Tokyo’s Nikkei 225 shed 1.6 per cent, China’s benchmark Shanghai Composite Index was off 0.3 per cent, Hong Kong’s Hang Seng declined 0.4 per cent, Seoul’s Kospi index shed 0.1 per cent and Sydney’s ASX/S&P 200 ended unchanged.