TORONTO (Bloomberg) — Canadian stocks gained for the first time in three days, led by raw-material shares, as Teck Resources Ltd. sold a stake to China's sovereign wealth fund.

Teck Resources, Canada's largest diversified mining company, jumped 8.1 percent after selling a 17 percent stake to China Investment Corp. for C$1.74 billion ($1.5 billion) to cut debt. Potash Corp. of Saskatchewan Inc., the world's biggest producer of the namesake fertiliser, rose for a second day after a Russian potash producer increased prices.

The Standard & Poor's/TSX Composite Index added 37.19 points, or 0.4 percent, to 10,283.10 in Toronto, trimming its weekly decline to one percent. Since rising to an eight-month high on June 11, the S&P/TSX has lost four percent.

"We're in a transition period, having realised the worst has been avoided, but waiting for a bump in economic activity that can boost earnings," said George Vasic, an equity strategist at UBS AG in Toronto.

US markets were closed in observance of Independence Day. The S&P/TSX lost 1.1 percent yesterday after American job cuts in June were more than expected, increasing concern the recession in Canada's largest trading partner will linger.

"It's a very quiet day with the US closed," Vasic said. "It's a bounce back from yesterday's sell-off."

Teck had the largest increase in the S&P/TSX, advancing 8.1 percent to C$19.99, as a gauge of materials producers gained the most among 10 industries in the index. Teck is betting that a "strategic partnership" with China may help the company win a larger share of the country's coking coal imports, which may rise to more than 20 million tons this year from 3.2 million tons last year, chief executive officer Donald Lindsay said in a telephone interview.

"For a lot of people looking at Teck's financial situation, there was certainly no opportunity for them to grow organically in the short term," said David Davidson, an analyst for Paradigm Capital Inc. in Toronto, who has a "buy" on Teck shares. "This opens it up."

Potash rose for a second day, adding two percent to C$113.30.

Ivanhoe Mines Ltd. surged for a second day, gaining four percent to C$8.32, after the UB Post website reported that an agreement with the Mongolian government to mine the Oyu Tolgoi copper and gold deposit might be signed by the end of this month. The shares gained 24 percent yesterday.

Canada's largest banks also rose. Toronto-Dominion Bank and Bank of Montreal advanced at least 0.8 percent to lead a measure of financial shares to its first gain in three days.