STOCK MARKET — Market recovers strongly after `No’ vote

The Toronto Stock Exchange, shaking from its encounter with the spectre of Quebec’s secession, rose strongly after Monday’s referendum result in that province. The TSE composite index jumped 79.4 points on Halloween to close at 4,459.16, up 106.97 points, or 2.5%, from the previous Tuesday.

Firm action by the Bank of Canada in the Tuesday treasury bill auction brought the yield on 90-day T-bills down to 5.929%. This fixed the bank rate at 6.18%, down 1.47 percentage points from the previous week’s rate. The major banks responded to the ease in central bank rates by taking a quarter-point off prime, which now sits at 7.75%.

Tuesday’s trading volume of just over 100 million shares was much higher than in recent weeks when it averaged about 60 million shares per day. Money that had stayed out of the market for weeks moved back in, bidding up stock prices and moving the index 130 points in the first 15 minutes of trading on Tuesday.

The Canadian dollar went through a harrowing night on Monday, as early results indicating a secessionist victory sunk the Loony to as low as US72.73 cents on Asian currency markets, which were open as the votes were counted. As results turned, showing a majority against the secession bill, the dollar rebounded to US74.94 cents. By the close of trading on Tuesday, it was valued at US74.35 cents, up US1.25 cents on the week. By presstime, the dollar was down slightly to US74.28 cents.

Precious metal markets were flat, as gold picked up 10 cents and silver and platinum both sank lower. The Wednesday morning fix for gold on the London market was US$382.50 per oz. after a quiet week. Silver was selling at US$5.33 per oz., off 2 cents, but platinum, which has been sliding steadily since mid-September, was down to US$2.50 per oz.

The TSE gold and precious metals sub-index took a hit, losing 299.27 points, or 3.1% of its value, and closed Tuesday at 9,580.68. The high-volume TSE gold stocks were lower, with Barrick Gold off $1.50 to $31.25 and Placer Dome down $1.38 to $29.50.

Hemlo Gold was off $1.50 to $11.25 on news that production at its Golden Giant mine had been shut down so that fractures in the shaft wall could be investigated. TVX Gold and Campbell Resources were both heavily traded, with TVX off 12 cents to $8.88 and Campbell down 6 cents to $1.10. Agnico Eagle lost $1.12 to close Tuesday at $14.88.

Base metals were much stronger on the London Metals Exchange, with spot prices on all major commodities rising this week. Copper led the way, adding 5 cents to post a spot price of US$1.31 per lb. Nickel was also stronger, with a 12 cents gain to US$3.96. Zinc and lead also posted higher prices.

Metals and minerals stocks were higher, thanks to strength in the metals markets and overall buying pressure on the buoyant TSE. The sub-index was up 304.18 points or 6.7% to 4,825.10. Inco, as usual, posted the highest volume among the big miners and rose $3.38 to $46.25. Noranda also traded heavily and was higher, closing at $26.88 for a gain of $1.88. Rio Algom, sensitive to copper prices, was up $1.12 to close Tuesday at $26.

Nickel issues were also generally up, with Falconbridge closing at $29.62 for a gain of $1.50. Diamond Fields Resources tacked on $2.38 to finish the report period at $24.12. Sherritt was down $1.50 to $17.38 despite price strength in nickel; the company recently announced that it hopes to spin off its nickel and cobalt interests as a separate company.

Junior exploration stocks were led by Montreal-listed Bresea Resources, which added another $6.50 to $44.50 on the strength of its interest in Bre-X Minerals. Goldstake Explorations, up 13 cents to 24 cents, announced it was negotiating to acquire an interest in a property in Indonesia along the same mineralized belt as Bre-X’s Busang deposit. Diabex Resources, also on Montreal, was back down to 13 cents, a loss of 13 cents. Chesbar Resources was up 48 cents to $1.37, having touched $1.60 during the week. Great Lakes Minerals was off 67 cents to 33 cents in heavy trading, on news that its 20%-owned Grouse Creek mine was experiencing production problems.