Canada Stocks Rise as Commodity Producers Rally on China

Canadian stocks rose, capping a fourth straight week of gains for the benchmark index, as an increase in metals prices boosted materials producers and China planned to remove the floor on lending rates.

Centerra Gold Inc. added 4.2 percent as the metal's price climbed for a second week. Athabasca Oil Corp. jumped 6.7 percent as oil rose to a 16-month high. BlackBerry Ltd. fell 1.3 percent, reversing an earlier rally of as much as 2.2 percent.

The Standard & Poor's/TSX Composite Index rose 56.28 points, or 0.5 percent, to 12,685.13 at 4 p.m. in Toronto. The benchmark gauge rallied 1.8 percent for the week. Trading volume was 8.4 percent below the 30-day average at this time of day.

"Materials, energy and financials are really the main areas," said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. He helps manage about $1 billion ($953 million). "There's a large commodity factor in the Toronto market. Gold and energy or oil stocks are up and it is nice to see them following the commodities. Financials have had a nice run and are pausing a bit today but are still up."

A government report showed inflation in June quickening for a second month in June as the prices of gasoline and automobiles rebounded. The consumer price index rose 1.2 percent from a year ago following a 0.7 percent gain in May, matching the Bloomberg economist surveys forecast, Statistics Canada said today from Ottawa.

'Subdued' Inflation

Bank of Canada Governor Stephen Poloz said this week that inflation will remain below his 2 percent target until mid-2015 and stay "subdued" over the next few months.

The People's Bank of China said it will remove the floor on lending rates offered by financial institutions starting tomorrow. The announcement builds on pledges by Premier Li Keqiang to expand an overhaul of interest rates, a development the World Bank says must be a priority in reform of the financial system.

Four of 10 groups in the S&P/TSX advanced, led by a 2 percent gain among producers of raw materials.

Centerra Gold added 4.2 percent to C$4.27 and Detour Gold Corp. increased 6.7 percent to C$10. The price of the metal rose 0.7 percent to $1,294 an ounce in New York. Silver and copper also advanced.

Athabasca Oil jumped 6.7 percent to C$7 and Penn West Petroleum Ltd. gained 6.3 percent to C$12.91. Oil was up 1 cent to $108.05 a barrel after climbing as much as 1.2 percent.

Financial shares rose 0.2 percent for the fourth gain in five sessions. The S&P/TSX Commercial Banks Index rose for the seventh straight day to trade near a record high.

BlackBerry dropped 1.3 percent to C$9.30. The stock was up as much as 2.2 percent after BMO Capital Markets analyst Timothy Long upgraded his rating from underperform to market perform, an equivalent of hold. Long said the stock had less downside after plunging 38 percent since June 27, the day before the company reported disappointing sales.