Toronto stocks surge higher on renewed optimism
By Natasha Elkington
TORONTO (Reuters) - The Toronto Stock Exchange's main index rallied nearly 200 points on Thursday after the world's top central banks injected billions of dollars into markets and on optimism about a possible plan to resolve the U.S. financial crisis.
The financial sector jumped 5.7 percent, boosted initially by central banks joining forces to pump $247 billion into the battered global financial system.
The stocks pared gains around midday, than rallied again late in the session on reports that U.S. Treasury Secretary Henry Paulson was considering creating an entity to deal with bad debt in an attempt to ease the U.S. financial crisis.
"Wild and crazy is the short answer," said Levente Mady, broker at MF Global Canada in Vancouver describing the day's volatile action.
"I think that this is a bear market bounce, we could probably see some follow-through, and I wouldn't be surprised if we went another 5 or 10 percent from these levels up higher, but eventually you are probably looking at lower levels three to six months from today," Mady added.
Leading the way among financials, Bank of Montreal BMO.TO was up 9.4 percent at C$49.35 and Bank of Nova Scotia BNS.TO was up 8.2 percent at C$47.37.
The S&P/TSX composite index .GSPTSE closed up 186.88 points, or 1.57 percent, at 12,064.57. The main index swung wildly during the day, rising more than 500 points earlier, then giving up nearly all of that before rebounding.
Coming into the session, the index had fallen nearly 900 points in the early part of the week as the failure of U.S. investment bank Lehman Brothers LEH.N and sharp stock declines among other U.S. financials sparked crisis of confidence on global markets. Continued...