TSX rallies to highest close in nearly three weeks

Thu Oct 4, 2012 5:45pm EDT
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By Claire Sibonney

TORONTO (Reuters) - Canada's main stock index notched its highest closing level in nearly three weeks on Thursday after reassuring comments from the European Central Bank chief and signs of improvement in the U.S. labor market supported demand for riskier assets.

Heavily-weighted financial and resource shares rose sharply, with the latter helped by higher prices for the underlying commodities.

Oil prices were up about 4 percent, getting an extra boost from inflamed tensions between Turkey and Syria, while gold hit its highest level in 11 months. <O/R> <GOL/>

Among the top gainers, Royal Bank of Canada (RY.TO: Quote) rose 0.9 percent to C$57.53, Barrick Gold (ABX.TO: Quote) jumped 1.8 percent to C$41.36 and Suncor Energy (SU.TO: Quote) added 1.3 percent to C$33.15.

"Today we got the big run-up in crude oil, so that's supported the energy sector ... but I think for cyclical stocks, folks may be looking for greater visibility that growth in China is picking up," said Fergal Smith, managing market strategist at Action Economics.

Data on Wednesday showed China's normally robust services sector weakened to an almost two-year low last month, while U.S. numbers rose, defying expectations for a slight decrease.

The TSX's slant towards globally economic sensitive commodity companies - which make up about half of the index - has caused the index to dramatically lag Wall Street in 2012. The TSX is up about 4 percent year to date, versus a 16 percent rise for the S&P 500.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended Thursday's session up 88.21 points, or 0.71 percent, to 12,447.68. Eight of the 10 sectors were positive.   Continued...

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