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abstacey

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TEC...your right. CHINA comes in with STRONG REPORT

posted on Apr 15, 2010 07:40PM

From Malcolm Morrison, The Canadian Press, April 15, 2010 - 5:08 p.m.

Toronto stock market rises as China reports strong growth and low inflation

By Malcolm Morrison, The Canadian Press

Article ToolsA man walks past a collage of copies of Chinese RMB, U.S. dollar and other foreign bills at a money exchange store in Hong Kong Thursday, April 15, 2010. China's economic growth reported Thursday surged to 11.9 percent in the first quarter, possibly giving Beijing room to allow its currency to rise, but analysts warned it faces growing pressure to cut back stimulus and keep the world's third-largest economy from overheating. (THE ASSOCIATED PRESS/

TORONTO - The Toronto stock market closed slightly higher Thursday amid strong economic data from China.

The S&P/TSX composite index moved ahead 7.11 points to 12,211.52 while the TSX Venture Exchange was up 4.62 points at 1,679.5.

China reported that its gross domestic product grew 11.9 per cent in the first quarter from a year earlier, much faster than anticipated.

This was good news for investors since China and other Asian countries have played a big role in leading the global economic recovery. In particular, strong demand has driven commodity prices and stocks sharply higher over the past year.

Part of the reason for the impressive growth rate is that "they were one of the first countries to enact a stimulus program," said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.

"When you have a downturn, the sooner you can apply stimulus, the less the downturn and the greater the chance you're going to come out - and that's what happened to China. As a percentage of GDP, it was as great as the U.S., it mitigated a lot of the downturn."

China also reported consumer prices rose 2.2 per cent on a year-over-year basis, well below the government's ceiling of three per cent. There have been worries that the Chinese government might have to further tighten lending in order to cool its hot economy.

A stronger U.S. dollar pushed the Canadian dollar down 0.41 of a cent to 99.67 cents US after closing above parity with the greenback Wednesday for the first time since May 2008.

TSX gains were led by the industrial sector as Canadian National Railways (TSX:CNR) gained $1.12 to $63.53.

Consumer discretionary stocks also moved ahead as auto parts company Magna International (TSX:MG.A) gained 92 cents to $64.19 and Corus Entertainment (TSX:CJR.B) advanced 30 cents to $20.07.

Commodity prices had a muted reaction to the Chinese data.

The May crude contract on the New York Mercantile Exchange was 33 cents lower at US$85.65 a barrel. On Wednesday, oil gained nearly US$2 a barrel after data showed a surprising decline in U.S. inventories. The energy sector was 0.35 per cent lower and Suncor Energy (TSX:SU) shed 28 cents to C$34.81.