Canada Stocks, Mining Shares, Rally on Rate Cuts; Barrick Soars

By John Kipphoff

Oct. 8 (Bloomberg) -- Canadian stocks rose, snapping a five-day slump, as raw-materials producers rallied from a two- year low after central banks cut interest rates to stem the worst financial crisis since the Great Depression.

Barrick Gold Corp. surged the most 21 years after bullion climbed above $900 an ounce as investors sought a haven from financial markets turmoil. Fertilizer maker Potash Corp. of Saskatchewan Inc. had its best advance since 1989 as grain prices rallied and seed producer Monsanto Co. said farmers haven't been affected by the global credit crisis.

Research In Motion Ltd. climbed for the first time this month on an announcement that it will launch its BlackBerry Storm phone next month to compete with Apple Inc.'s iPhone. Energy companies declined, led by Talisman Energy Inc., as oil fell to the lowest in 10 months after the U.S. reported a bigger-than-expected gain in crude and gasoline inventories.

``The central banks are going to throw money at his problem until they fix it,'' said David Cockfield, who helps oversee about $2 billion as a portfolio manager at Leon Frazer & Associates in Toronto. ``It's an interesting market -- I have no idea if this is the turn we want.''

The Standard & Poor's/TSX Composite Index climbed 2.3 percent to 10,056.31 in Toronto after falling as much as 3.4 percent earlier. The index dropped 16 percent in the five days this month before today, and is trading 33 percent below its June 18 record, after a contraction in global credit dragged down commodity prices and the materials and energy shares that make up more than two-fifths of the S&P/TSX value.


Coordinated Effort

The U.S. Federal Reserve, the Bank of Canada and the European Central Bank among others announced a half percentage- point cut in borrowing costs in a coordinated effort to unlock credit markets after the U.S. mortgage meltdown spread. U.S. U.S. Treasury Secretary Henry Paulson said federal regulators are prepared to do more if necessary.

Barrick Gold, the biggest bullion producer, climbed 19 percent to C$40.05 for its biggest gain in 21 years. Rival Goldcorp Inc. rose 20 percent to C$34.60, the most in a decade.

Potash Corp., the biggest maker of crop nutrients by market value, added 14 percent to C$110.50 for its largest gain since trading began in November 1989.

A measure of raw-materials producers in the S&P/TSX rose 14 percent for its biggest gain since Bloomberg records begin in December 1987. The measure is still down 11 percent this month on concern the credit crunch will cause a recession and choke off demand for resources and the related assets.

Research In Motion advanced, rising 5.4 percent to C$64.19 today after it was raised to ``buy'' from ``hold'' by Canaccord Adams analysts led by Peter Misek in Toronto. They predicted that the launch of the Storm will have a ``positive'' impact.

Talisman Energy, the oil and natural-gas producer with about two-thirds of its reserves in North America or the North Sea, dropped 3 percent to C$11.18. Enerplus Resources Fund, Canada's oldest energy income trust, declined 6.6 percent to C$29.03. Energy stocks slipped 0.3 percent as a group, taking their October decline to 24 percent.

To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.