CANADA STOCKS-TSX bounces back after 5-day plunge

Wed Apr 11, 2012 4:53pm EDT
 
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* TSX ends up 91.47 points, or 0.77 pct, at 12,026.76
    * Shares hit 2012 low in previous session

    By Claire Sibonney	
    TORONTO, April 11 (Reuters) - Toronto's main stock index
rebounded on Wednesday in a broad-based rally following five
straight days of losses that took Canadian shares to their
lowest level this year. 	
    The market took its cue from a rebound on Wall Street a day
after aluminum producer Alcoa Inc surprised investors
with a first-quarter profit, an encouraging start to earnings
season. 	
    The most influential gainer was Canadian National Railway
, up 2.4 percent to C$77.84, after its smaller rival
Canadian Pacific Railway on Tuesday forecast a four-fold
increase in first-quarter earnings. 	
    CP Railway was up 1.6 percent to C$74.40.	
    Among other heavy advancers, Suncor Energy rose 1.5
percent to C$30.12, Royal Bank of Canada added 0.6
percent to C$56.30 and Bank of Nova Scotia climbed 1
percent to C$54.91.	
    "We've been down for so many days in the last week that
we're finally due for an up day, but  I still think we're going
to have some continued weakness in the markets from here," said
Arthur Salzer, chief executive officer of Northland Wealth
Management.	
    The recent string of selloffs was prompted by a resurgence
of fears about global growth, including disappointing U.S.
employment data, signs of soft domestic demand in China and a
flare-up of European debt jitters.	
    "We are getting a lot of news from Spain in regards to their
banking system and their availability of money. Things look very
very tight," added Salzer.	
    "Although we're comfortable with the Canadian banking
system, I still think we're in a bit of a liquidity crunch and
we could have weaker markets for the next four or five weeks
from here."	
    The Toronto Stock Exchange's S&P/TSX composite index
 ended up 91.47 points, or 0.77 percent, at 12,026.76.	
    "Toronto is more oversold than New York at this stage," said
Ron Meisels, technical analyst and president of Phases & Cycles
in Montreal.	
    The index broke below 12,000 in the previous session and
turned slightly negative for the year. Meisels noted that 12,000
is not only a key psychological level for investors but also the
50 percent correction point between the lows of December and the
highs of February. The next major support level is eyed at
11,500.	
    "We peaked in February, then people just got turned off when
they saw that Toronto was already turning down, so a lot of
people went towards New York," added Meisels.	
    "But there is a ray of hope, given that we're nearing the
end of this bull move and given that Toronto usually does best
in the tail end of the market."	
    Bill Horton, chief investment officer at MD Physician
Services, cautioned against getting too excited about the market
rebound.	
    "The mistake might be to assume that everything is back to
normal when we're really still highly dependent on policymakers
getting it right," said Horton. "So when we see broad moves in
similar directions on the same day, it means that there's a
correlation that is more reflective of the risk-on/risk-off
environment we saw last year." 	
    In individual company news, Canada's Dollarama shot
up nearly 7 percent to C$51.70 after the dollar-store chain
posted a surge in fourth-quarter profit and boosted its dividend
by 22 percent.