Roundup: Canadian stocks surge on oil's leap

Canada's main stock market in Toronto surged Thursday after crude oil traded above 40 U.S. dollars for the first time this year, amid the prospect of gradual rate hikes by the U.S. central bank and hope for an output cap by top oil producers.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index gained 143.17 points, or 1.06 percent, to close at 13,621.30 points. Seven of the TSX index's eight main sub-sectors moved higher.

Oil prices extended rally Thursday on a weaker U.S. dollar. A Federal Reserve policy decision on Wednesday indicating two U.S. rate hikes this year instead of four also drew oil buyers using other currencies.

The declining output from the United States also buoyed the market. Crude production of the country lost 10,000 to 9.068 million barrels a day last week, according to the weekly report of the Energy Information Administration (EIA) released Wednesday.

Texas light sweet crude for April delivery moved up 1.74 U.S. dollars to settle at 40.2 dollars a barrel, while Brent crude for May delivery increased 1.21 dollars to close at 41.54 dollars a barrel.

A spillover of the good day for crude, TSX energy and mining groups ran higher by 1.78 percent and 5.59 percent respectively.

High-profile gainers included Teck Resources, up 17.44 percent to 11.58 Canadian dollars (8.92 U.S. dollars) per share, and MEG Energy Corp., up 9.76 percent to 6.75 Canadian dollars, but among key losers were Pacific Exploration & Production Corporation, declining 8.89 percent to 0.82 Canadian dollar, and First Quantum Minerals Ltd. with a 3.07 percent retreat.

Gold issues fell back massively, as Barrick Gold Corporation wiped off 3.61 percent, Yamana Gold Inc. dipped down 3.12 percent, and OceanaGold Corporation shrank 6.81 percent. However, Harte Gold Corp. racked up 29.63 percent to 0.175 Canadian dollar as the Toronto-based company announced final closing under private placement.

In an exception, the health care sector fell 2.68 percent, with Valeant Pharmaceuticals International down 11.82 percent at 38.66 Canadian dollars after sources disclosed that the company's creditors are preparing tough demands for default negotiations.

Bombardier Inc. shares rose 7.83 percent to 1.24 Canadian dollars as the Canadian government has finished studying a request from the struggling aerospace and transportation company for 1 billion Canadian dollars in aid and is preparing to make an announcement within weeks.

Canadian Prime Minister Justin Trudeau while visiting New York would not commit to a quick decision, insisting the government is taking a "deliberate and thoughtful" approach that would balance the interests of the aerospace industry as well as taxpayers.

"We are very much looking at this as what is the right investment and is it a smart investment for Canadian jobs for the Canadian economy and for the global market and that's the lens we're taking on that decision and that's why we're taking our time with it," Trudeau said.

Meanwhile, the value of Canadian wholesale trade remained unchanged in January from December as lower auto sales canceled out gains in other sectors, Statistics Canada said Thursday.

The Canadian dollar, closely tied to the oil prices, passed the 77 U.S. cents mark on Thursday, its highest level of the year. "[The loonie] is trading at levels last seen in mid-October, with support from relative central bank policy as well as higher oil prices and risk appetite," Scotiabank said of the loonie's stunning two-cent rise within the span of barely 24 hours.

"The market surmised that when combined with the general stabilization of the oil price and equity markets the Fed may have room to be bullish on U.S. rate hikes," said Michael J Smith, a Toronto currency expert at AFEX, a global non-bank provider of foreign currency services. "This was not the case and the Fed surprised markets with its reduction in interest rate expectations which led to a fast sell off for the (U.S.) dollar across the board."

By closing, the Canadian dollar was traded higher at 0.7699 U.S. dollar, compared with Wednesday's closing rate of 0.7621 U.S. dollar. Enditem