CANADA STOCKS-TSX surges on Fed plan despite Potash drop

Thu Nov 4, 2010 4:35pm EDT
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 * TSX ends up 207.67 points at 12,878.79
 * Highest close since September 2008
 * Fed stimulus move sends greenback lower, commodities up
 * Potash drops 3.3 pct after Canada rejects BHP bid
 (Updates to close, adds quote)
 By Jennifer Kwan
 TORONTO, Nov 4 (Reuters) - Toronto's main stock index
closed at its highest level in more than two years on Thursday
as commodity prices soared in reaction to the U.S. Federal
Reserve's plan to stimulate the U.S. economy.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE finished the session up 207.67 points, or 1.64
percent, at 12,878.79, its strongest close since Sept. 19,
2008, led by soaring energy and materials sectors, up 3.4
percent and 2.5 percent, respectively.
 The surge higher overpowered a drop in the shares of
fertilizer giant Potash Corp (POT.TO: Quote), which was the top net
loser on the market. Potash skidded 3.3 percent to C$141.43,
after the Canadian government said after the market close on
Wednesday it would block Anglo-Australian miner BHP Billiton's
(BLT.L: Quote) $39 billion bid acquire the company and left little
room for a modified offer. [ID:nN03272751] For more stories,
please see: [ID:nN22340110]
 Fund managers and analysts said the fallout will affect
just a few major companies, and that Canada remains mostly open
for business. Rejection of the bid could also prompt more
clarity on existing rules on foreign investment.
[ID:nN04105003] [ID:nN03138111]
 Elvis Picardo, analyst and strategist at Global Securities
in Vancouver, said it's "quite remarkable that the stock hasn't
reacted more adversely".
 "The two factors that are supporting it are extremely
positive sentiment in the overall markets. Secondly, the stock
is being seen as a fairly attractive investment at these
levels," he said.
 Seven of the TSX index's 10 main groups ended higher.
 Big names on the upside included Suncor Energy (SU.TO: Quote), up
7.8 percent at C$35.48, and Canadian Natural Resources
(CNQ.TO: Quote), which rose 4.2 percent to C$39.33. Both were
bolstered by a rise in the oil price above $86 a barrel, as
well as earnings that beat market expectations. [O/R]
[ID:nSGE6A30C2] [ID:nSGE6A30FZ]
 Barrick Gold (ABX.TO: Quote) rose 1.1 percent to C$49.20, and Teck
Resources TCKb.TO climbed 4 percent to C$47.80, as
commodity-related stocks surged on the Fed's announcement on
Wednesday that it would buy $600 billion more in government
bonds by the middle of next year to try to revive the U.S.
economy. For Take a Look, please see: [ID:nFEDAHEAD]
 ($1=$1.00 Canadian)
 (Reporting by Jennifer Kwan; editing by Peter Galloway)