By Blaise Robinson
Reuters
February 17, 2006
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TORONTO (Reuters) - Toronto stocks rose for a second day on Friday, as mining and energy shares teamed up again to lead the rally, amid a sharp climb in oil prices and concerns over possible zinc shortages.
Adrian Mastracci, investment counsel at Vancouver’s ‘fee-only’ KCM Wealth Management, says, "The consumers in the United States are still buying, and therefore China is still producing, pushing up demand for resources.”
The Toronto Stock Exchange's S&P/TSX composite index closed up 53.73 points, or 0.46 percent, at 11,758.04.
The commodity-heavy benchmark index ended the week up 0.9 percent, taking back some of the ground lost in six of the past nine sessions.
Half the TSX index's 10 main groups made gains, with the oil and gas sector surging 1.46 percent, as crude prices raced back to $60 on renewed geopolitical tensions.
U.S. crude oil futures settled at $59.88 per barrel, up $1.42 or 2.4 percent, as fighting escalated in Nigeria between government forces and militants, raising fears of a supply disruption from the world's eighth largest oil exporter.
"We will see oil prices continue their roller-coaster ride, swinging between $50 and $70, and it's certainly not going to be a straight line," said Adrian Mastracci, investment counsel and president at KCM Wealth Management Inc.
The NYMEX session was shortened ahead of the U.S. Presidents Day holiday weekend, with financial markets south of the border closed on Monday.
Irwin Michael, portfolio manager at ABC Funds, said with the Canadian market very weak over the past 10 days as energy and mining shares were badly beaten, bargain hunters jumped in.
"Today it's a bit of a snap back because these stocks were probably oversold," Michael said.
"With the U.S. holiday on Monday, investors may be squaring positions before the weekend."
Among the energy's leaders, Nexen Inc. gained C$2.26, or 3.89 percent, to C$60.30, after the oil explorer pleased investors with strong quarterly results, while Canadian Natural Resources rose C$2.10, or 3.42 percent, to C$63.42.
The mining subindex, part of the materials group, surged 3 percent as zinc industry experts meeting in Orlando, Florida, warned that shortages of zinc concentrate supplies could continue for at least the next two years.
Teck Cominco Ltd., the world's No. 1 zinc miner, jumped C$3.47, or 5.2 percent, to C$70.15.
"The consumers in the United States are still buying, and therefore China is still producing, pushing up demand for resources. No doubt the metals are going to be a desirable place to be in," Mastracci said.
Falconbridge Ltd. rose C$1.11, or 3 percent, to C$37.76 after the miner reached a tentative three-year agreement with unionized workers at its Falcondo ferro-nickel plant in the Dominican Republic.
On the down side, Quebecor World sank 5.2 percent, or 67 Canadian cents, to C$12.13, its lowest level since 1992.
The printer posted a sharp quarterly loss on Thursday.
The blue chip S&P/TSX 60 index closed 3.48 points, or 0.53 percent, higher at 664.43.
Market volume was 314 million shares worth C$4.7 billion changing hands. Advancers outpaced decliners 956 to 553.
South of the border, U.S. stocks ended lower, hurt by computer maker Dell Inc.'s disappointing earnings outlook and unexpected strength in producer prices that may signal inflation.
The Dow Jones industrial average was down 5.36 points, or 0.05 percent, at 11,115.32, while the Nasdaq composite index was down 12.27 points, or 0.53 percent, at 2,282.36.
($1=$1.15 Canadian)
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