UPDATE 1-Toronto stocks rally on U.S. mortgage bailout plan

Mon Sep 8, 2008 9:52am EDT
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TORONTO, Sept 8 (Reuters) - The Toronto Stock Exchange's main index rallied on Monday morning, jolted higher by the bailout of U.S. home mortgage giants Fannie Mae FNM.N and Freddie Mac FRE.N.

Soon after the open, the S&P/TSX composite index .GSPTSE was up 211.13 points, or 1.7 percent, at 13,027.55, as the bailout eased concerns over the year-old credit market crisis.

The U.S. government took control of the two mortgage finance firms on Sunday in the latest in a series of emergency steps to help the economy. For details, see [ID:nN07463067]

The heavily-weighted financial services sector led the rally, up 3.3 percent. Royal Bank of Canada RY.TO was up 1.9 percent at C$49.34.

The energy sector rose 1.5 percent with oil above $108 a barrel as Hurricane Ike whirled toward the U.S. Gulf oil hub, and traders awaited OPEC's decision this week on output policy. EnCana Corp ECA.TO climbed 1.3 percent to C$72.80 and Canadian Natural Resources CNQ.TO 0.8 percent to C$84.00.

Also in the oil patch, Italy's Eni SpA ENI.MI has agreed to buy Canada's First Calgary Petroleums Ltd FCP.TO in a cash deal worth C$923 million to boost its oil and gas reserves. [ID:nL8618034]

First Calgary slipped 2.3 percent to C$3.47.

Materials, home to resource shares, rose 1.9 percent as the price of bullion firmed and most base metals were higher.

Barrick Gold ABX.TO was up 1.9 percent to C$33.19. ($1=$1.06 Canadian) (Reporting by Jennifer Kwan; editing by Janet Guttsman)