(The Canadian Press) -- TORONTO - The Toronto stock market closed higher after a day of sparse trading Monday as investors took in strong first-quarter economic data and looked ahead to Tuesday's Bank of Canada interest rate announcement.
The S&P/TSX composite index was up 32 points to 13,829.7 on a day of light trading as U.S. markets were closed for the Memorial Day holiday. The TSX Venture Exchange lost 2.7 points to 2,098.
The Canadian exchanges tend to turn in largely flat performances when U.S. markets are closed.
The TSX found support from strong gross domestic product figures released by Statistics Canada and renewed worries over Greece's debt situation -- which was likely driving investors to the safe haven of gold and to healthier Canadian stocks -- said John Stephenson, senior vice-president at First Asset Fund Inc.
"There's a sense of fear starting to creep back into the market and people looking at some of the traditional safe havens, namely gold," he said.
"You've got Canada looking like a relatively good place to be."
Gold producers are big drivers on the resource-heavy TSX and the mining sector and materials index were among the top gainers Monday. The June gold contract rose $2.80 to US$1,539.10 an ounce in electronic trading on the New York Mercantile Exchange. On the TSX, Barrick Gold Corp. (TSX:ABX) shares lost nine cents to C$46.32.
Statistics Canada reported real gross domestic product grew at an annualized rate of 3.9 per cent in the first quarter, after expanding 3.1 per cent in the fourth quarter of 2010.
Not only was the number slightly below the four per cent consensus expectation, but the elements of growth clearly signalled a sharp braking in the economy ahead.
The composition included a heavy dose of production placed in storage awaiting future sales, with inventory build-up accounting for three quarters of the growth. Meanwhile, consumers were in hibernation, contributing only 0.1 percentage points to growth, and net trade was a drag, with the solid 1.6 per cent rise in exports from the previous quarter swamped by a 2.2 per cent gain in imports.
"There were no major surprises in today's raft of Q1 results, which confirmed that the Canadian economy started 2011 on a strong footing thanks to a surge in auto production," Douglas Porter, deputy chief economist at BMO Capital Markets wrote in a note.
"Unfortunately, we already know that auto output has taken a big step back in Q2, and nothing has stepped up in a big way to keep growth on track. While we do look for somewhat firmer growth to re-emerge in the second half of the year, the Q1 results clearly show that the consumer recovery has largely run its course."
The Canadian dollar turned around earlier losses to close 0.02 of a cent higher at 102.34 cents US.
The loonie could be under additional pressure on commodity markets this week after the Bank of Canada delivers its next announcement on interest rates on Tuesday. Economists expect the central bank will hold the overnight rate at one per cent.
"The GDP was a little under consensus view so I think the betting is there will be no change in rates coming into this meeting and the Bank of Canada will hold pat until September," Stephenson said.
Oil prices were down 21 cents to US$100.38 a barrel in electronic trading on the New York Mercantile Exchange at market close, though prices did not settle as the commodity market was closed for the U.S. holiday.
The energy sector on the TSX was up 0.7 per cent, with shares in Canadian Natural Resources (TSX:CNQ) up 1.3 per cent or 53 cents at C$42.09.
The July copper contract fell two cents to $4.16 a pound. The mining sector was the biggest gainer on the TSX, up 0.9 per cent with shares in Teck Resources Ltd (TSX:TCK.B) up 1.3 per cent or 66 cents to $50.98. Shares in Potash Corp. of Saskatchewan (TSX:POT) were also among the biggest market movers, up 44 cents to $55.13.
Uranium stocks were under pressure after Germany's environment minister said Chancellor Angela Merkel's coalition government has agreed to shut down all of the country's nuclear power plants by 2022.
The utilities index was the biggest loser on the TSX, down one per cent, with shares in Uranium One Inc. (TSX:UUU) down 2.6 per cent or 10 cents to $3.70 and Cameco Corp. (TSX:CCO) shares down 3.3 per cent or 94 cents to $27.36.
In corporate news, Fortis Inc. (TSX:FTS) is acquiring Central Vermont Public Service Corp. (NYSE:CV), a Vermont-based integrated electric utility company for US$700 million, in a transaction that includes the assumption of about US$230 million in debt. Fortis shares fell two per cent or 69 cents to $32.97.