Canada Stocks Rally on Oil as EnCana, Barrick, Royal Bank Gain

By John Kipphoff

Nov. 13 (Bloomberg) -- Canadian stocks rose for the first time in three days as commodity producers including EnCana Corp. and Barrick Gold Corp. climbed along with rebounding oil, metal and wheat prices.

Royal Bank of Canada, the nation's biggest lender, led financial stocks to their biggest gain this month. Research In Motion Ltd., Canada's largest publicly traded technology company, closed little changed after slumping earlier as UBS AG cut the company's share-price target, citing the expectation that worldwide mobile-phone shipments will drop in 2009.

The Standard & Poor's/TSX Composite Index rose 4.8 percent to 9,352.78 in Toronto. Canada's main benchmark slid as much as 3.9 percent earlier to near its closing price of 8,537.34 on Oct. 27, when it fell the most in two decades, reaching a four- year low, on concern bank finance companies' credit losses will mount and a recession will destroy demand for raw-materials

``It tested the October lows and didn't crash through them,'' said Paul Hand, managing director of equity trading at RBC Capital Markets in Toronto. ``That could be significant. Energy shares are rallying on the oil price and gold's now up. The market had been oversold the last few days.''

Raw-materials stocks jumped 10 percent, the biggest gain among the 10 industries in the S&P/TSX. Energy shares climbed 6.2 percent and financial companies added 3.1 percent. The three gauges account for almost three quarters of the S&P/TSX value.

Barrick Gold, the largest bullion miner, added 11 percent to C$28.55. Goldcorp Inc., the second-biggest producer by market value, jumped 17 percent to C$27.99, the most in five weeks. Kinross Gold Corp. rose 19 percent to C$16.90.

Fertilizer Maker

Potash Corp. of Saskatchewan Inc., the largest maker of fertilizers, gained 5 percent to C$89.87.

EnCana, the country's biggest energy company by market value, added 8.7 percent to C$58.11, the most since Oct. 20. Canadian Oil Sands Trust, lead partner in the largest tarsands producer, climbed 12 percent to C$27.14 after dropping 19 percent in the three prior sessions. Talisman Energy Inc. rose 12 percent to C$11.37.

Crude oil for December delivery rose 3.7 percent to $58.24 a barrel in New York after the U.S. reported a smaller-than- expected supply increase and refiners cut operating rates. Oil earlier touched the lowest since Jan. 30, 2007.

Gold futures for December delivery rose to $735.70 an ounce at 4:39 p.m. in electronic trading on the Comex division of the New York Mercantile Exchange, up $30.70 from the day's settlement. Wheat climbed a third day in Chicago. The Reuters/Jefferies CRB Index of 19 raw materials rebounded today after earlier touching the lowest in five years.

Banks

Royal Bank climbed 5.3 percent to C$46.25. Bank of Nova Scotia, the country's third-largest bank, added 5 percent to C$39.45.

Manulife Financial Corp. fell 1.9 percent to C$22.90 on speculation it may need to raise more capital. Canada's biggest insurance company borrowed C$3 billion ($2.57 billion) from banks last week after reporting its biggest profit decline in seven years.

Research In Motion Ltd. fell 1 cent to C$53.59 after dropping as much as 10 percent to C$48.01, the lowest since January 2007. The maker of the BlackBerry e-mail phone had its share-price target cut 30 percent to $50 (C$61.71) by Maynard Um and Jeffrey Fan at UBS AG. The analysts said they expect world handset shipments to slide 9 percent in 2009, revising their forecast of 3 percent growth.

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