TSX bounces on commodities, euro zone hopes

Wed Jun 6, 2012 4:48pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - Canada's benchmark stock index rose to a one-week high on Wednesday as mining and energy shares got a boost on signs major central banks might act to resuscitate a slowing global economy.

The Toronto market followed global equities higher as a Federal Reserve official sounded more inclined to consider further help for the U.S. economy, while the European Central Bank left rates unchanged and its president, Mario Draghi, suggested near-term action was unlikely.

But some investors interpreted his comment that risks to the economy had grown as a sign of possible future action by the ECB.

The heavily-weighted energy, financials and mining issues pushed the index higher as the price of oil, gold and copper edged higher.

Big names on the upside included Suncor Energy, up 3.3 percent at C$29.24, and Cenovus rose 5.2 percent to C$32.47. Potash Corp was up 1.1 percent at C$40.11 and Teck Resources rose 2.9 percent to C$32.31.

"There is some growing belief that we might get more action from the U.S. Fed in conjunction with the fact that there are some signs that possibly there might be a bit of progress coming out of the situation to address the turmoil going on in Europe," said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri.

"It's partly a deep-breath rally to some extent. That things aren't coming to an end like many might have thought last week."

The Toronto Stock Exchange's S&P/TSX composite index ended the day up 125.69 points, or 1.1 percent, at 11,633.40, with eight of its 10 subsectors higher. The index hit a high of 11,686.99, its strongest since May 29.   Continued...

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch