Thursday, October 18, 2012

TSX rises as Celtic deal spurs rise in oil shares

TORONTO (Reuters) - Toronto's main stock index notched its highest close in more than a month on Wednesday, as a takeover deal for Celtic Exploration Ltd drove its shares higher and spurred gains in other oil and gas companies.

The index followed advances in global stocks, as hopes grew that Spain will ask for a bailout next month, alleviating the euro zone debt crisis, and as data that groundbreaking on U.S. homes surged in September helped soothe ongoing worries about the global economic growth.

Exxon Mobil Corp agreed to buy Celtic Exploration for C$2.6 billion ($2.64 billion). Celtic's shares surged 45.09 percent, to C$26.29 and were the most influential index mover.

"Certainly the Celtic news is pretty important, and then you just have a decent tone in the rest of the global markets to help along a little bit," said Levente Mady, senior portfolio manager at PI Financial Corp.

Energy stocks - about 25 percent of the index - were up 1.43 percent. Suncor Energy climbed 1.33 percent to finish at C$33.60, while natural gas producer, Encana Corp , rose 2.43 percent to C$22.78.

"There's some excitement around, again, the idea that a major acquisition is occurring with a beloved Canadian name like Celtic this morning. I think that gets the whole space excited," said Mike Newton, associate director and portfolio manager at Macquarie Private Wealth Inc.

Banks shares also gained, rounding out the top five most influential stocks on the index. The financial group, which make up nearly a third of the index's weight, rose 0.36 percent. Royal Bank of Canada was up 0.57 percent at C$58.19, while Bank of Nova Scotia rose 0.43 percent to end at C$54.31.

The Toronto Stock Exchange's S&P/TSX composite index <.gsptse> rose 53.54 points, or 0.43 percent, to 12,461.24. It was the highest close since September 14, when it finished at 12,499.47. Seven of the index's 10 main groups advanced.

Offsetting some of the gains was a 1.24 percent retreat in Canadian National Railway , which finished at C$87.67. The overall industrials group was down 0.41 percent.

In corporate news, Harry Winston Diamond Corp shares jumped 3.67 percent, to end at C$13.83, after the company said it was looking to sell its watch and jewelry business to concentrate on mining.

Penn West Petroleum , one of Canada's biggest conventional oil and gas producers, closed 1.39 percent higher at C$13.85, after the company said it would sell some non-core assets for up to C$1.3 billion ($1.32 billion) to repay a portion of its debt.

Potash finished the day up 0.05 percent at C$41.12, recouping a nearly 2.7 percent loss earlier in the session after the world's biggest fertilizer producer said full-year earnings will be below the low end of its previous forecast range due to delays in new contracts with buyers in China and India.

"I know the CEO was publicly stating not more than a month ago that he expected the two- to three-year outlook to be very good, but notably absent was any short-term commentary. So I think the clues were there," said Newton.

The overall materials group, of which Potash is a member, climbed 0.55 percent.

Ivanplats Ltd , an Africa-focused miner, rose 6.3 percent after an initial public offering pegged the value of the company at more than C$2.5 billion ($2.55 billion).

Ivanplats, backed by one of the mining sector's most well-known and colorful financiers - Robert Friedland, announced a long-awaited plan to list in Toronto last month.

(Editing by Leslie Adler)


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