Roundup: Rising commodity prices send Canadian stocks higher

Canada's main stock market in Toronto went up Monday amid higher commodity prices and renewed investor confidence in global economic growth.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index inched up 32.23 points, or 0.25 percent, to close at 12,845.63 points. Six of the TSX index's eight main sub-sectors were higher.

The commodity-heavy TSX got a lift as the March contract for North American benchmark crude settled 1.84 U.S. dollars higher at 31.48 dollars a barrel on the New York Mercantile Exchange, while Brent crude for April delivery climbed 1.68 U.S. dollars to close at 34.69 dollars a barrel on the London ICE Futures Exchange.

Part of the catalyst for the oil rally was due to a report from the International Energy Agency, which said the pace of global supply growth is dwindling as energy companies slash production to tighten their balance sheets.

"The fact that we're continuing to see those (supply) numbers come down means production is likely going to be reined in," said Craig Fehr, a Canadian markets strategist at Edward Jones in St. Louis.

Volatility in the price of oil and in stock markets is expected to continue for some time, even though investors have shown optimism in recent weeks compared with the lows seen in equities at the start of the year.

It is believed that over the long term, better economic data coming from the U.S. and China will drive the market higher, which may in turn lead to better corporate earnings.

"This week we have the release of U.S. Durable goods on Thursday and U.S. Personal Consumption Expenditure (PCE, the Fed's preferred inflation gauge) on Friday to see how the U.S. economy is getting on," said Michael J Smith, a Toronto currency expert at AFEX, a global non-bank provider of foreign currency services.

Riding the oil rally, TSX energy group advanced 2.83 percent, with Calgary-based Spartan Energy Corp. climbed 4.92 percent, while Encana Corporation went up 5.09 percent.

The mining sector also got a boost of 6.67 percent. Canada's biggest miner Teck Resources Limited extended a sharp 14.48 percent rally, and Toronto-based base metal mining company Lundin Mining Corp. rose 4.84 percent, and Vancouver-based Capstone Mining Corp. recorded a 16.42 percent hike.

Base metal prices were up after a rise in China's steel industry raised the prospect of a revival in metals demand, given that China is the world's biggest consumer of metals. Gains in copper and zinc boosted the materials sector.

Gold, which has been rallying lately as a perceived safe haven, however, slipped 20.70 U.S. dollars to settle at 1,210.10 U.S. dollars an ounce as investors felt comfortable about accepting more risk.

Barrick Gold Corporation ticked up 1.68 percent to 17.55 Canadian dollars (about 12.8 U.S. dollars) per share after the world's largest gold digger said it would spend about 2 billion U.S. dollars on projects in Nevada of the U.S. and Peru for construction starting in 2019.

Other influential decliners included several of the index's heavyweight banks that are lining up to report quarterly results later this week.

Bank of Montreal, which will be the first of the six main banks to report its results Tuesday, lost 0.70 percent to 73.87 Canadian dollars per share.

Toronto-Dominion Bank was down 0.36 percent, and Royal Bank of Canada declined 1.11 percent. The financials group retreated after early rally.

Montreal-based Valeant Pharmaceuticals plunged again after-hours Monday after the Wall Street Journal reported that the drugmaker may restate earnings after an internal review. Valeant slumped 10.97 percent to 104.16 Canadian dollars per share.

Canada's Liberal government is now forecasting larger than expected deficits for the next two years even before adding billions in promised spending in its first budget, which will be tabled on March 22.

Crude oil prices (for West Texas Intermediate) are expected to average 40 U.S. dollars per barrel in 2016.

The Canadian dollar was traded higher at 0.7293 U.S. dollar, compared with Friday's closing rate of 0.7263 U.S. dollar. Endit