CANADA STOCKS-Broad-based rally lifts TSX to two-year high

Tue Oct 5, 2010 6:10pm EDT
 
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   * TSX up 175.06 points, or 1.42 percent, at 12,498.00
 * All 10 of TSX's main sectors end higher
 * Gold, energy producers climb with bullion, oil prices
 (Adds details, quotes)
 By Solarina Ho
 TORONTO, Oct 5 (Reuters) - Toronto's main stock index had
its highest finish in more than two years on Tuesday as
commodity prices surged on expectations the U.S. Federal
Reserve would follow in the footsteps of the Bank of Japan and
take steps to stimulate the economy.
 "The real highlight is materials stocks, especially gold
stocks," said Jean-Francois Dion, vice-president and portfolio
adviser of Canadian equities at RBC Dominion Securities.
 "A lot of anticipation around the quantitative easing
program coming from the Fed at its next meeting -- that's
putting pressure on the U.S. dollar, really helping gold and
metals."
 The S&P/TSX composite index .GSPTSE finished up 175.06
points, or 1.42 percent, at 12,498.00, it highest finish since
Sept. 26, 2008.
 The materials sector rose 2.3 percent, driven by a strong
showing from base-metal miners, including Teck Resources Ltd
(TCKb.TO: Quote), which jumped 4.1 percent to C$44.06, and Inmet
Mining Corp IMN.TO, which was up 3.3 percent at C$58.72.
[MET/L]
 Gold miners, buoyed by record bullion prices, were also
higher. Barrick Gold Corp (ABX.TO: Quote) rose 2.3 percent to C$48.18,
and Kinross Gold Corp (K.TO: Quote) climbed 2.7 percent to C$19.79.
 The price of gold surged to record levels above $1,340 an
ounce and copper hit two-year highs at $8,229 a tonne after the
Bank of Japan said it would pump more funds into the country's
struggling economy and keep interest rates virtually at zero.
[ID:nTOE69305D] That move stoked expectations the Fed might do
the same, weakening the greenback and lifting U.S.
dollar-denominated commodities.
 The energy sector climbed 1.4 percent as U.S. crude oil
futures rose 2 percent to $82.82 a barrel. Suncor Energy
(SU.TO: Quote) was up 3.7 percent at C$34.86. Canadian Natural
Resources Ltd (CNQ.TO: Quote) gained 3.4 percent to C$37.34.
 The broad-based rally pushed all 10 of the TSX's main
sectors higher. The financial group climbed 1.5 percent, with
all the major banks advancing. Toronto-Dominion Bank (TD.TO: Quote)
rose 2.2 percent to C$75.31 while Royal Bank of Canada (RY.TO: Quote)
climbed 1.9 percent to C$54.67.
 "I think we've come a long way in a very short period of
time. The market is getting to an overbought position in my
mind," said Rick Hutcheon, president and chief operating
officer at RKH Investments. "I'm a bit wary as to how long this
can persist at this rate of climb."
 In individual company news, Potash Corp (POT.TO: Quote) ended down
1.4 percent at C$145.64. The fertilizer producer, which is
fending off a $39 billion hostile takeover bid from BHP
Billiton, slammed a report commissioned by Saskatchewan that
favors BHP's bid over a possible bid from a Chinese entity.
[ID:nN05181079]
 Bombardier Inc (BBDb.TO: Quote), which won a C$1 billion contract
to build nearly 500 new subway cars in Montreal, climbed 3
percent to C$5.17. [ID:nN05207151]
 ($1=$1.02 Canadian)
 (Editing by Rob Wilson)