Source: The Canadian Press

Mining companies led the way to a positive session on the Toronto stock market Wednesday as stocks caught up to a sharp run-up in copper prices while investors also reacted to news from the weekend that China is again raising a key interest rate.

The S&P/TSX composite index gained 66.01 points to 13,449.17 while the TSX Venture Exchange jumped 56.17 points to 2,243.57.

The Canadian dollar gained ground against the American dollar, rising 0.58 of a cent from Friday’s close to 99.94 cents US.

China raised interest rates 0.25% on Saturday to 5.81%, the second time in just over two months it has hiked borrowing costs to control inflation, which reached 5.1% in November.

Markets have often reacted negatively this past year to attempts by Beijing to control inflation, fearing such moved could significantly slow China’s economy. Strong Chinese demand has helped push the resource-heavy TSX up about 14% this year.

However, Toronto mining stocks have benefited from a sharp run-up in the price of copper since the end of last week. The March contract on the New York Mercantile Exchange closed at $4.31 a pound Wednesday, down two cents from Tuesday’s record close but still well above Friday’s closing price of just under US$4.26.

“There’s a recognition that we’re getting interest rate hikes in China because their economy is strong,” said Colin Cieszynski, market analyst at CMC Markets Canada.

“What they’re trying to do with interest rates is keep the price pressures from taking off because the underlying demand is still there and still strong. And that’s probably what’s been supporting the price of copper, the price of crude.”

The base metals sector was ahead almost 2% with Teck Resources (TSX:TCK.B) gaining $1.51 to $59.91 and HudBay Minerals (TSX:HBM) up 29 cents at $17.83.

Shares in Thompson Creek Metals Company Inc. (TSX:TCM) rose 99 cents to $14.56 after China said it was reducing the amount of rare earths it will export for the first half of the year by more than 10%. A number of companies in North America — notably Molycorp Inc. in the U.S. and Thompson Creek Metals Co. in Canada — are hurrying to open or reopen rare earth mines. Two Australian companies are also preparing to mine rare earths.

Elsewhere in the mining sector, Nunavut Iron Ore Acquisition Inc. has raised its offer to buy Baffinland Iron Mines Corp. (TSX:BIM) to $1.40 per share for 60% of Baffinland shares. Baffinland shares were unchanged at $1.34.

The gold sector rose as bullion prices shook off early losses and the February contract on the Nymex rose $7.90 to US$1,413.50 an ounce. Barrick Gold Corp. (TSX:ABX) rose $1.04 to C$53.13 while Goldcorp Inc. (TSX:G) improved by 49 cents to $45.63.

The energy sector was down slightly as the February crude contract in New York lost 37 cents to US$91.12 a barrel. Canadian Natural Resources (TSX:CNQ) gave back 40 cents to C$44.30 and Suncor Energy (TSX:SU) declined 34 cents to $38.

The tech sector was also a drag as Research In Motion Ltd. (TSX:RIM) gave back 70 cents to $58.15.

New York markets were higher with the Dow Jones industrial average up 9.84 points at 11,585.38.

The Nasdaq composite index rose 4.05 points to 2,666.93 while the S&P 500 index climbed 1.27 points to 1,259.78.

In other corporate news, General Moly Inc. (TSX:GMO) shares soared $1.64 or 30.37% to $7.04. The company, which has its headquarters near Denver, recently received a US$40-million equity investment by Hanlong (USA) Mining Investment Inc., which now owns about 13.9% of General Moly.

Oil and gas producer Tudor Corp. (TSX:TDR) said it has voluntarily applied for delisting on the Toronto Stock Exchange on or before Jan. 31. Marzcorp Oil & Gas Inc. said in October that it would acquire Tudor. The combined company is applying for listing on the TSX Venture Exchange. Tudor shares were down two cents at 48 cents.

Alliance Grain Traders Inc. (TSX:AGT) says a fire at its compound in Turkey has damaged up to 10,000 metric tonnes of grain and legumes. The monetary value of the loss had yet to be determined. Alliance shares declined 20.5 cents to $27.88.