TSX boosted by conciliatory U.S. budget comments
By Alastair Sharp
TORONTO (Reuters) - Canada's benchmark stock index jumped on Friday, led by financial and resource-related shares, as investors cheered conciliatory statements from U.S. politicians after they held talks on avoiding the "fiscal cliff" that threatens to drive the U.S. economy into recession.
The index had fallen in morning trade, weighed down by signs of global economic weakness, but swung higher after U.S. legislators vowed to find common ground to help the world's largest economy avoid what could be debilitating tax hikes and spending cuts.
"We've definitely seen a swing up today on more promising talk from the Democrats," said Youssef Zohny, portfolio manager at Stenner Investment Partners, a unit of Richardson GMP.
"We've seen a fairly sharp selloff in the last week or so and you're definitely starting to see a few bargain hunters come in today. As well, oil's up today so that's helping lift some of the commodity sector," Zohny said.
Oil rose as a fire on a Gulf of Mexico platform and the escalating conflict between Israel and Palestinians stoked supply concerns. <O/R>
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 66.34 points, or 0.56 percent, at 11,877.72, with broad gains across nine of its 10 main sectors. It nevertheless notched a 2.6 percent drop for the week, its sharpest weekly fall since May.
"It shows you how low our expectations are right now that you can get that kind of a rally just by coming up to a microphone and saying 'hey, we all understand each other'," said Mike Newton, portfolio manager at Macquarie Private Wealth, referring to the comments from congressional Democrats and Republicans.
"What could be exciting about it is, imagine the rally that will occur when they come out with something very concrete," he said. Continued...