Canadian Stocks Rise, Led by Goldcorp, Suncor; Great-West Drops

By John Kipphoff

Dec. 10 (Bloomberg) -- Canadian stocks rose a third time in four days, led by metals and energy producers, as commodity prices rallied on speculation bailouts and economic stimulus measures around the world will boost demand.

Goldcorp Inc. gained 12 percent as bullion and copper rose on prospects that a weaker U.S. dollar will raise commodities’ appeal as an inflation hedge and a $15 billion rescue plan for U.S. automakers will support demand for industrial metals and motor fuels. Suncor Energy Inc. rose 11 percent leading a rebound in energy producers. Insurer Great-West Lifeco Inc. slid on a plan to sell stock and shore up capital.

“There’s some optimism that the fiscal and monetary stimulus being announced globally will have a positive impact,” said Laura Wallace, who helps oversee about $300 million as managing director at Coleford Investment Management Ltd. in Toronto. “Gold is about fears of a return of inflation. In Canada, the market goes up when oil goes up, and it goes down when oil goes down.”

The Standard & Poor’s/TSX Composite Index rose 2.8 percent to 8,634 in Toronto, after oil gained 3.4 percent. The Canadian benchmark fell yesterday the first time in three days after Royal Bank of Canada announced a share sale to boost capital reduced by writedowns on U.S. debt investment.

The S&P/TSX, which gets 75 percent of its value from finance, energy and mining shares, rose Dec. 8 after U.S. President-elect Barack Obama pledged to implement the biggest U.S. public works spending plan since the 1950s when he takes office in January.

‘Entering a Recession’

The benchmark for Canadian stocks has still slid 38 percent in 2008, poised for its worst year, after global credit losses approached $1 trillion and commodities dropped from records. The Bank of Canada slashed its key lending rate to 1.5 percent yesterday, the lowest since 1958, saying the country is “entering a recession.”

Goldcorp, the second-biggest bullion mining company by market value, gained C$3.56 to C$34.50, the steepest gain since Nov. 21. Barrick Gold Corp., the largest producer, climbed 9.7 percent to C$38.50.

Gold futures for February delivery rose a third day, adding 4.5 percent to $808.80 an ounce in New York. Copper gained in New York and corn in Chicago. Crude-oil futures climbed $1.45 to $43.52 a barrel in New York percent on speculation that the economy and energy demand will revive as U.S. lawmakers negotiate a $15 billion bailout plan for automakers.

Cutting Output

Makers of crop nutrients advanced after joining rivals in announcing production cuts that may support fertilizer prices. Agrium Inc., North America’s third-largest fertilizer producer by market value, rose 11 percent to C$38.58 after saying today that it will halt production at its Fort Saskatchewan nitrogen plant because of a “significant” increase in inventories.

Potash Corp. of Saskatchewan Inc., the biggest maker of crop nutrients by market value, added C$9.40 to C$87.60 taking a four-day gain to a record 39 percent. Potash said yesterday that it will cut its 2009 output of the fertilizer by 2 million metric tons beginning in January.

A measure of raw-materials stocks gained most among the 10 industries in the S&P/TSX, adding 11 percent today for its steepest rise since Nov. 21, when stocks rallied a day after dropping to a five-year low. Energy share gained 5.1 percent today. Both measures are still down 36 percent this year.

Suncor, the second-largest oilsands producer, rose C$2.73 to C$26.70 for its steepest gain since Nov. 26. EnCana Corp., Canada’s largest oil and gas producer, added 6.4 percent to C$59.64. Talisman Energy Inc. jumped 8 percent to C$11.69.

Considers Buying

“We’re looking at adding to the oils,” said Wallace, whose firm holds Suncor, among others. “We’re not going to zero, we will recover. Oil’s not going back to $150 soon, but it’ll stabilize and go higher as the economy recovers, and Suncor will be a major beneficiary of that.”

Great-West dropped 9.4 percent to C$20.20, the lowest closing price since October 2003. Canada’s second-largest insurer plans to sell about C$1 billion ($790.7 million) in stock, including $400.1 million to be bought by parent company Power Financial Corp. Power Financial dropped 6.5 percent to C$22.30. Financial share fell 1.4 percent today a s group, taking their decline in 2008 to 41 percent.

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