TSX surges 2.5 percent as oil shares rebound; Sherritt jumps
TORONTO (Reuters) - Canada's main stock index had its biggest one-day jump in more than three years on Wednesday as a rebound in oil prices sent its heavily weighted energy sector up by more than 7 percent.
The country's biggest oil and gas companies rallied as world crude prices jumped as much as 6 percent, ending weeks of nearly nonstop selling, with traders betting the long rout of the commodity may be running out of steam. [O/R]
Also supporting the sector, Spain's Repsol agreed on Tuesday to buy Talisman Energy TLM.TO, Canada's fifth-largest independent oil producer, for $8.3 billion with the drop in oil prices spurring energy companies to take the plunge on big M&A deals.
"The Talisman deal yesterday had a lot do with just getting some confidence back in the market ... maybe identifying that there is some value there," said Brian Pow, vice president, research, and equity analyst at Acumen Capital Partners in Calgary.
"A lot of the time everything gets wrapped up with fear. So when you have any little bit of confidence, you get people rushing back to the markets. There could be some short-covering taking place, all that kind of stuff that builds momentum."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE, which fell more than 5 percent last week, closed up 352.36 points, or 2.54 percent, at 14,213.88.
The index's energy group was the biggest gainer, rising 7.3 percent. Stocks leading the market higher included Suncor Energy (SU.TO: Quote), up 8.2 percent at C$35.71, and Canadian Natural Resources CNQ.TO, which rose 6.2 percent to C$34.53.
Shares of miner Sherritt International Corp S.TO were another big gainer, rising 26 percent to C$2.87.
The U.S. move to normalize relations with Cuba could pave the way for Sherritt to export the nickel and cobalt it mines in Cuba to one of the biggest markets in the world, Chief Executive David Pathe told Reuters. Continued...