Canada Stocks Rise, Led by Suncor, Barrick, on China Stimulus

By John Kipphoff

Nov. 10 (Bloomberg) -- Canadian stocks rose a second day, led by commodity producers, as oil, metals and grain prices surged on speculation a $586 billion stimulus package in China will spur demand.

Suncor Energy Inc. and Barrick Gold Corp. paced the rally among energy and raw-materials shares. Manulife Financial Corp. rose on an upgrade at RBC Capital Markets. Nortel Networks Corp. declined after posting its biggest net loss in seven years.

The Standard & Poor's/TSX Composite Index gained 3.2 percent to 9,898.59 at 9:42 a.m. in Toronto.

Canada's main equity gauge, which gets three-quarters of its value from energy, mining and financial shares, has dropped 34 percent from a June 18 record as commodity prices suffered their worst slump in five decades and financial institutions worldwide racked up more than $685 billion in credit losses and writedowns tied to U.S. subprime mortgages and other debt.

Suncor, the world's second-largest oil-sands mining company, climbed 9.5 percent to C$27.92, the most since Oct. 29. EnCana Corp., Canada's biggest energy company by market value, advanced 3.2 percent to C$60.03. Nexen Inc., another oil and gas producer, jumped 12 percent to C$21.13.

Barrick Gold, the world's biggest bullion mining company, gained 5.9 percent to C$29.82. Teck Cominco Ltd., the nation's largest diversified mining company, added 9.3 percent to C$12.33.

Potash Gains

Potash Corp. of Saskatchewan Inc., the biggest maker of crop nutrients by market value, rose 7.5 percent to C$103.23.

Crude oil and copper rose more than 5 percent after China, the second-largest oil consumer, said yesterday that it'll spend 4 trillion yuan through 2010 on housing and infrastructure. Oil also gained after Saudi Aramco, the biggest state oil company, told South Korean and Japanese refiners it would cut December supplies. Price of gas, gold, soybeans and wheat also advanced.

Manulife, North America's largest insurance company by market value, climbed 2.6 percent to C$26.68. The stock was raised to ``outperform'' from ``sector perform'' by Andre- Philippe Hardy at RBC Capital Markets.

The Toronto-based analyst cited Manulife's relative strength among insurers, based on its recently bolstered capital, which may put it in a better position than rivals to take advantage of opportunities such as acquisitions. The shares rose 2.6 percent to C$26.

Nortel, North America's biggest maker of phone gear, fell 6.7 percent to C$1.39. The Toronto-based company posted a net loss of $3.4 billion and announced plans to cut 1,300 jobs after customers scaled back budgets.

Tim Hortons Inc. slipped 1.3 percent to C$29.80. Canada's biggest coffee-and-doughnut chain was cut to ``sector perform'' from ``sector outperform'' by Perry Caicco at CIBC World Markets. The stock was also rated ``sell'' in new coverage at Goldman Sachs Group Inc. Tim Hortons said Nov. 7 that it won't meet its U.S. sales target this year and will close some stores in New England.

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