TSX gains 123 points as mining megadeal lifts market
The TSX scored a solid advance Monday as a $40-billion US takeover deal involving two of Canada’s biggest mining companies sparked widespread buying in mining stocks.
The TSX metals and mining sub-index rose 5.7 per cent, with shares of Inco and Falconbridge surging on news of a deal with U.S. mining giant Phelps Dodge.
Inco stock climbed $7.03 to $72.28; Falconbridge added $2.83 to $58.33.
Other mining stocks rose as investors bet that Monday’s big deal could prompt other takeovers in the sector.
Teck Cominco, which has made its own offer for Inco, was up $2.65 to $65. Copper miner Aur Resources got an 80-cent lift to $16.80; EuroZinc Mining rose 10 cents to $2.57.
The S&P/TSX composite index gained 123.18 points to end the day at 11,372.20.
Oil stocks got a lift from higher crude oil prices as the August futures contract gained almost $1 to $71.85 US a barrel.
Suncor Energy added $1.95 to $84.49; Canadian Natural Resources climbed $2.03 to $57.74.
In other market news, negative announcements battered the stock prices of two companies.
Biotech company Vasogen saw its stock lose 73 per cent of its value (down $1.50 to 54 cents) after it reported disappointing initial results from a study of its Celacade technology designed to treat chronic heart failure.
Vancouver-based Sierra Systems Group issued a full-year profit warning, in part because of the cancellation of a big U.S. contract. The firm’s stock fell 77 cents to $7.40.
Shares of Great-West Lifeco rose 38 cents to $28.94. The firm bought American pension assets worth $7.5 billion US from Metropolitan Life Insurance Co. for an undisclosed sum.
U.S. markets moved moderately higher as investors remained focused on Thursday’s interest rate announcement from the U.S. Federal Reserve.
Most analysts expect the Fed to hike its key lending rate by a quarter of a percentage point to 5.25 per cent.
The Dow Jones industrial average gained 56 points to 11,045.28.
The Nasdaq composite index rose 12.20 points to 2133.70.
The Canadian dollar gained 0.07 cents to 89.07 cents US.
Source: www.cbc.ca/
