CANADA STOCKS-TSX surges on China, Europe hopes

Tue May 22, 2012 12:02pm EDT
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* TSX up 225.85 pts, or 2 pct, at 11,506.49
    * Materials, energy and financials lead gains
    * Talk of 'eurobond' boosts equity markets
    * U.S. housing data, China hopes help demand outlook

    By Jon Cook	
    TORONTO, May 22 (Reuters) - Canada's main stock index was on
track for its biggest one-day gain this year on Tuesday, led by
resource and financial shares, on optimism spurred by strong
U.S. housing data, China's plans to boost sagging growth and
ahead of a meeting of European leaders to tackle the region's
debt crisis.	
    Markets rose on both sides of the Atlantic ahead of an
informal summit of European Union leaders in Brussels on
Wednesday, where France's Francois Hollande will push a proposal
for the eurozone to issue common bonds, despite Germany's
long-standing opposition. 	
    "There are an awful lot of people who believe that the
'eurobond' is the answer," said John Kinsey, portfolio manager
at Caldwell Securities Ltd.	
    "It would be guaranteed by the 17 members of the euro and
Germany has opposed this because they're afraid it would be a
QE1 or QE2 kind of equivalent."	
    All of Canada's 10 main sectors rose, led by heavyweight
materials, up 3.5 percent, and energy, which rose 3.3 percent.	
    The most influential resource gainers included Suncor Energy
, up 4.7 percent at C$28.69, Canadian Natural Resources
, which climbed 3.6 percent to C$31.04, Barrick Gold
, rising 3.3 percent to C$39.12, Goldcorp Inc, up
3.1 percent to C$36.55 and Potash Corp, which rose 2.7
percent to C$40.50.	
    Financials climbed 1.3 percent, led by the major banks.
Toronto-Dominion Bank gained 1.7 percent to C$78.23,
Royal Bank of Canada was up 1.1 percent at C$52.28 and
Bank of Nova Scotia rose 1.1 percent to C$51.67.	
    Fairfax Financial Holdings Ltd was the most notable
downside performer, slipping 0.1 percent to C$406.59 after the
property and casualty insurer said it will buy Thomas Cook
Group's 77 percent stake in its India operations for about $150
million as the UK holiday firm continues to pay down its debt.
    At 11:20 a.m. (1520 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 225.85 points, or 2
percent, at 11,506.49. It was on track for its biggest
single-day gain since Jan. 3.	
    Also boosting sentiment was U.S. data on Tuesday that showed
home resales rose in April to their highest annual rate in
nearly two years and a drop in foreclosures pushed prices
higher, hopeful signs for the country's economic
    Metals prices, most notably copper, rebounded on Tuesday on
reports that top metals consumer China will speed approval of
infrastructure investments to combat slowing growth and a
sluggish property sector.  	
    In other company news, shares of Niko Resources Ltd 
plunged nearly 9 percent to C$31.04 after the oil and gas
producer said it will relinquish its 15-percent interest in the
D4 block at the Mahanadi basin, off India's east coast.