The Toronto stock market advanced Wednesday amid signs that economic growth in China held up better than expected during the first quarter.
The S&P/TSX composite index climbed 130.5 points to 14,434.3 after the world’s second-largest economy grew 7.4 per cent from a year earlier in the January-March quarter, down from the previous quarter’s 7.7 per cent. It was the weakest growth in China since the 2008-09 global crisis but the number was still better than what many analysts had expected.
“A lot of investors were fearing the worst (because) a lot of the economic data out of China has been quite soft over the last little while,” noted Allan Small, senior adviser at Holliswealth.
“If (growth) stays in this range, there’s nothing to worry about.”
The Canadian dollar was down 0.31 of a cent to 90.7 cents (U.S.) after the Bank of Canada said it was keeping its key rate unchanged at one per cent. The bank also lowered its forecast for first quarter growth this year to 1.5 per cent, from 2.5 per cent, but attributed the downgrade mostly to temporary impacts of a unusually severe winter.
New York’s Dow Jones industrials ran ahead 129.5 points to 16,392.07, the Nasdaq composite index gained 41.36 points to 4,075.5 and the S&P index points climbed 14.8 points to 1,857.78.
There was also a heavy slate of mixed earnings news to consider.
On Wednesday, supermarket chain Metro Inc. posted adjusted earnings of $1.07 per share, five cents higher than analysts had expected. Overall sales were up 1.7 per cent year-year, rising to $2.55-billion from $2.51-billion and Metro shares were up $1.55 or 2.41 per cent to $65.83.
In the U.S., Yahoo’s earnings per share ex-items were 38 cents, a penny higher than analyst forecasts and its shares jumped $1.68 or 4.9 per cent to $35.89 (U.S.). Net earnings were $312-million, or 29 cents per share compared with $390-million or 35 cents per share a year earlier.
Prices for oil and metals rose in the wake of the Chinese economic data and the energy sector rose one per cent, while May crude contract on the New York Mercantile Exchange gained 37 cents to $104.12 a barrel.
The TSX base metals component was up 0.7 per cent as the May copper contract rose five cents to $3.04 a pound.
The gold sector was the only TSX decliner, down 0.7 per cent while June bullion inched 20 cents lower to $1,300.10 an ounce.
There was a major acquisition in the gold sector that will see Yamana Gold Inc. and Agnico Eagle Mines jointly acquire 100 per cent of Osisko Mining in a cash and stock deal worth $3.9-billion. The companies are paying Osisko $8.15 a share. The offer represents an 11 per cent premium to a hostile bid for Osisko that had been mounted by Goldcorp.
“You’re going to see a lot of this kind of mergers and acquisitions because the price of gold has dropped by so much and a lot of these companies now are not expanding based on any more gold in the ground – they’re having to acquire other companies to expand,” added Small.
Yamana shares dipped 34 cents to $8.84 (Canadian), Agnico Eagle dropped $2.26 to $31.19, Goldcorp rose 17 cents to $26.17 while Osisko shares were up 44 cents to $7.87.Report Typo/Error
- Goldcorp Inc$16.91+0.13(+0.77%)
- Goldcorp Inc$21.95+0.07(+0.32%)
- Yahoo! Inc$36.50+0.91(+2.56%)
- S&P/TSX Composite$14.07K+11.92(+0.08%)
- S&P 500 INDEX$2.09K-2.55(-0.12%)
- Dow Jones Industrials$17.81K-43.83(-0.25%)
- NASDAQ NMS COMPOSITE INDEX$4.89K-2.56(-0.05%)
- Gold Front Month Futures$1.23K+7.10(+0.58%)
- Updated May 24 11:16 PM CDT. Delayed by at least 15 minutes.