TSX rises on hopes for euro zone rescue

Tue Sep 27, 2011 5:44pm EDT
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By Trish Nixon

TORONTO (Reuters) - Toronto's main stock index ended higher on Tuesday, building on a rally that began late on Monday, as optimism grew that euro zone policymakers were readying decisive action to tackle the region's debt crisis.

The index surged nearly 3 percent in intraday trade, hitting a session high of 12,057.95, as European officials were seen considering plans to increase the size of the bailout fund and to recapitalize banks.

But sharp selling heading into the close highlighted investors' ongoing nervousness.

"We're kind of on a roller coaster ride here, all the focus on the sovereign debt problems in Europe," said John Kinsey, a portfolio manager at Caldwell Securities Ltd.

"Today is one of those days where people are optimistic that something may happen, and it looks like maybe they're on track to get something accomplished ... (but) tomorrow could be another one of those bad days."

The Toronto Stock Exchange's S&P/TSX composite index ended the session up 113.90 points, or 0.97 percent, at 11,821.09.

Base-metal miners and energy issues led the gains as commodities rebounded across the board. Suncor Energy was up 2.6 percent at C$28.38, while First Quantum Minerals surged 9.7 percent to C$16.40.

Financial stocks rose 0.7 percent. Bank of Nova Scotia gained 1.3 percent to C$52.97 and Manulife Financial was up 2.1 percent at C$12.25.   Continued...

<p>People walk by a Bay Street sign at the financial district in Toronto in this October 10, 2008 file photo. REUTERS/Mark Blinch</p>