Toronto stocks set to rise with buoyant oil, MDS
Toronto’s main stock index pointed to a higher start on Thursday, as a jump in crude oil and natural gas prices could lift shares of energy producers, which make up about a third of the resource-driven index.
In the oil patch, EnCana Corp. will be in the spotlight after it said it would create a partnership with ConocoPhillips to combine two of EnCana’s oil sands projects with two ConocoPhillips refineries.
The firms said they expect to spend about $10.7 billion over the next decade on the projects.
A blockbuster deal involving MDS Inc. could also help boost shares of biotech companies.
Oil climbed back above $60 a barrel, up more than 2 percent, after an OPEC delegate said the producer group will cut output by 1 million barrels per day to stop the recent sharp fall in prices.
“We’ve had a bit of a washout recently, stocks have been hurt pretty badly, so I wouldn’t be surprised to get a bounce here,” said Rick Hutcheon, president and chief operating officer at RKH Investments.
The composite index has lost nearly 5 percent over the past four weeks, but it may have not reached a floor yet, Hutcheon said.
“I think the commodities will continue to correct, and that’s going to weigh on the Canadian market. I don’t think it’s going to collapse, but I don’t see a lot of upside for it,” he said.
“We could see a bounce going into the winter months, but depending on what the weather over the winter looks like, we could see the market heading back south again.”
In the health care group, MDS will be in focus after the health science company said it agreed to sell its Canadian laboratory services business in a deal worth C$1.33 billion.
AnorMED Inc. could also see activity after it received a proposal from U.S.-based Genzyme Corp. to increase its tender offer for AnorMED to more than $12 per share in cash from $8.55 per share.
In the gold sector, Iamgold Corp. could attract attention after UBS raised its rating on the gold producer to ‘buy’ from ‘neutral’, saying Iamgold’s bid for rival Cambior Inc. was likely to be completed and it would make Iamgold the 10th largest gold producer globally.
The Toronto Stock Exchange S&P/TSX composite index closed 92 points higher, at 11,618.12 on Wednesday, reversing an earlier sharp plunge amid high volatility in commodity prices.
($1=$1.13 Canadian)
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