The Toronto stock market registered a solid gain late morning Monday as investors largely brushed aside data that indicated China’s economic growth rate has slowed slightly.
The S&P/TSX composite index was ahead 89.26 points to 13,977.47, adding to last week’s one per cent gain, with strength coming from miners and tech companies.
The Canadian dollar rose 0.07 of a cent to 91.18 cents U.S. two days before the Bank of Canada makes its next announcement on interest rates.
It was a relatively quiet session with U.S. markets closed for the Martin Luther King holiday.
“We need U.S. economic data to really confirm the trend and obviously we need to see where liquidity is deepest, meaning the U.S., for direction of markets,” said Paul Taylor, chief investment officer, Fundamental Canadian Equities BMO Global Asset Management.
“The fact that the Canadian market is up and that we’re knocking on 14,000 means little when the U.S. is closed.”
The Chinese economy grew at an annual pace of 7.7 per cent over a year earlier, down from the previous quarter’s 7.8 per cent. Growth for the full year was 7.7 per cent, tying 2012 for the weakest annual performance since 1999.
But the news didn’t come as a huge surprise to markets, which have gotten used to the fact that double-digit Chinese growth is something that won’t be happening again any time soon.
“It was widely expected,” said BMO Capital Markets senior economist Jennifer Lee.
“The results weren’t too bad and continue to illustrate an economy that is inching towards more consumption-led, not investment/export-led, growth.”
TSX advancers were led by the tech sector, up 2.25 per cent with BlackBerry (TSX:BB) ahead $1.10 or 11 per cent to $11.08, on top of a six per cent advance Friday after Citron Research raised its price target to US$15. Elsewhere, Open Text (TSX:OTC) gained $1.85 to $100.99 ahead of the company posting earnings on Thursday.
The battered gold sector continued to make gains, up 1.4 per cent as February bullion rose $4.50 to US$1,256.40 an ounce in electronic trading on the New York Mercantile Exchange. The sector was the biggest loser in 2013 on the TSX.
“The fundamentals for sustained uptrend in the commodity are not there but the liquidity and sentiment are starting to swing back in its favour — it just got so oversold,” added Taylor.
“But it’s just a short term phenomena, I don’t believe that it’s the start of anything in the way of a sustainable trend.”
Barrick Gold (TSX:ABX) gained 85 cents to C$21.46 while Goldcorp (TSX:G) ran ahead 30 cents to $25.73.
Osisko Mining Corp. (TSX:OSK) said Monday that shareholders should give its board time to find an alternative to Goldcorp’s hostile $2.6-billion takeover offer, which it called inadequate. Osisko shares have traded well above the $5.95 implied value of the Goldcorp offer since the stock-and-cash proposal was first announced last week. Osisko shares slipped four cents to $6.43.
The base metals sector was ahead 0.5 per cent as March copper shed a penny to US$3.34 a pound. Teck Resources (TSX:TCK.B) added 34 cents to C$29.
Financials were also supportive, up 0.6 per cent as Royal Bank (TSX:RY) climbed 86 cents to $72.72.
The energy sector was slightly higher and oil prices were lower. The February crude oil contract declined 75 cents to US$93.62 a barrel. Cenovus Energy (TSX:CVE) was up 22 cents to $29.75.
Elsewhere on the corporate front, WestJet Airlines Ltd. says it is bringing its new Encore regional service to Ontario. The airline (TSX:WJA) says it will start with routes between Toronto and Thunder Bay, Ont., and between Thunder Bay and Winnipeg. Its shares slipped 24 cents to $26.84.
In Europe, Deutsche Bank, Germany’s biggest lender, announced a large fourth-quarter loss, largely due to weak investment banking results and the cost of strengthening its finances.
The bank posted a fourth-quarter net loss of 965 million euros, an announcement that came 10 days before it was scheduled to release its results. The figure was below analysts’ expectations. Revenues during the fourth quarter were down 16 per cent year-on-year at 6.6 billion euros.
European markets were mixed as London’s FTSE 100 index was up 0.08 per cent, Frankfurt’s DAX was down 0.37 per cent and the Paris CAC 40 was off 0.21 per cent.
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