China bulls who have faith the authorities can always avert crisis - beware. Banking regulators in particular lack the tools to deal with systemic threats, says Breakingviews' Peter Thal Larsen.Reuters
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 66.67 points to 14,370.59 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 main economic number wasn't as bad as some feared," observed BMO Capital Markets senior economist Jennifer Lee.
"China's economy is taking a breather but this is fully expected and growth for the year should still come in near the 7.5 per cent target," Lee said.
There was also 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. Yamana shares dipped five cents to $9.13, Agnico Eagle dropped 73 cents to $32.72, Goldcorp rose 57 cents to $26.57 while Osisko shares were up 32 cents to $7.75.
The Canadian dollar was up 0.03 of a cent to 91.13 cents (U.S.) ahead of the Bank of Canada's mid-morning announcement on interest rates. The bank is expected to leave its key rate at one per cent, where it's been since September 2010.
New York's Dow Jones industrials ran ahead 105.77 points to 16,368.33, the Nasdaq composite index gained 30.25 points to 4,064.41 and the S&P index points climbed 10.96 points to 1,853.94.
There was also a heavy slate of mixed earnings news to consider.
On Wednesday, supermarket chain Metro Inc. posted $96.9-million in quarterly net earnings, down 73.3 per cent from the same quarter of 2013 when results included an unusual gain from the sale of Metro's investment in convenience store chain Alimentation Couche-Tard. Adjusted earnings were $1.07 per share, up from 98 cents per share last year and 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 $1.33 to $65.61.
In the U.S., chip giant Intel posted earnings per share of 38 cents, a penny more than expectations. Revenue grew to $12.8-billion (U.S.) from $12.6-billion because of solid demand for tablet processors and its data centre services, although it narrowly missed expectations of $12.81-billion and its edged up 29 cents to $27.06.
And Yahoo's earnings per share ex-items were 38 cents, a penny higher than analyst forecasts and its shares jumped $2.64 or 7.7 per cent to $36.85. 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 TSX base metals component led advancers, up 0.86 per cent as the May copper contract rose two cents to $3.01 a pound.
The energy sector rose 0.8 per cent while May crude contract on the New York Mercantile Exchange gained 99 cents to $104.74 a barrel.
The gold sector was the only TSX decliner, down a slight 0.1 per cent while June bullion was up $2.30 to $1,302.60 an ounce.