Roundup: Canadian stocks continue to rise on GDP data, Japan rates cut

Canada's main stock market in Toronto maintained the upward momentum Friday supported by Canadian GDP growth in November and Japan's surprise rates move.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index rose 230.20 points, or 1.83 percent, to close at 12,822.13 points. All of the TSX index's eight main sub-sectors ended higher.

Canada's economy resumed growing in November, expanding by 0.3 percent from the month before, thanks mainly to increases in trade, manufacturing and oil and gas extraction, Statistics Canada reported Friday.

The monthly growth follows no growth at all in October and a drop of 0.5 percent in September. That growth figure matched the consensus expectation of economists, who noted that the gains were relatively broad-based, as goods-producing industries expanded by 0.4 percent while service-producing industries rose by 0.2 percent.

Wholesale and retail trade both grew, with wholesale trade surging by 1.3 percent after contracting for four months in a row. Manufacturing output also grew, rising 0.4 percent in November. Factory output had fallen in both September and October.

"The bounce higher in November GDP was encouraging, although it still did not fully offset the 0.5 percent decline in September that was followed by flat activity in October," noted RBC assistant chief economist Paul Ferley.

Amid all the gloom in the energy sector, Friday's GDP report said oil and gas extraction grew by 2.1 percent in November. Non-conventional oil production rose 3.4 percent as the industry continued to recover from a big drop in September caused by production difficulties and maintenance shutdowns.

South of the border, however, the U.S. Commerce Department reported Friday that GDP in the final three months of the year slowed sharply to an annual growth rate of 0.7 percent.

In an unexpected move, the Bank of Japan on Friday introduced a negative interest policy for the first time, seeking to shore up a stumbling recovery in the world's third-largest economy.

The Japanese central bank said it is imposing a 0.1 percent fee on some new commercial bank deposits, effectively a negative interest rate. It hopes that will encourage commercial banks to lend more, rather than keeping cash at the central bank, and stimulate investment and growth.

"The obvious idea behind this move is to get the stagnant Japanese economy moving by the banks leading more money into the economy, it remains to be seen if this will work but this is the first major Western economy to move into negative interest rates (could Canada be next?)," said Michael J Smith, a Toronto currency expert at AFEX, a global non-bank provider of foreign currency services.

Last week, the Bank of Canada decided to hold its benchmark interest rate at current levels of 0.5 percent. The Canadian central bank cut its rate twice last year in an attempt to stimulate the economy, and some economists have been expecting another cut.

The European Central Bank has already imposed negative interest rates, after leaving interest rates near zero failed to entice banks into seeking higher returns through lending.

Japan's rates decision rattled global stock market investors but North American markets took positive response. The Toronto market staged a broad comeback supported by oil prices recovery.

TSX's energy group gained 1.28 percent but the winner was miners, with a surge of 8.64 percent. Vancouver-based First Quantum Minerals Ltd. rocketed 16.09 percent to 3.03 Canadian dollars a share, Barrick Gold Corporation, the largest gold mining company in the world, added 2.73 percent to 13.93 dollars a share, and Canadian mining giant Teck Resources rose 4.81 percent to 5.23 dollars a share.

Canadian smartphone maker BlackBerry said Friday it has received approval from the Toronto Stock Exchange to more than double its existing share buyback program and repurchase up to 5.8 percent of its public float.

The approval will allow the Waterloo, Ontario-based company to buy back up to 27 million shares, up from its earlier plan to repurchase 12 million. The total public float as of June 22 was 464,723,304 common shares.

By Friday closing, shares of BlackBerry were up over 3 percent at 9.99 Canadian dollars on the TSX and 7.12 U.S. dollars on Nasdaq.

The Canadian dollar was traded higher at 0.7140 U.S. dollar, compared with Thursday's closing rate of 0.7118 U.S. dollar. Enditem