* TSX closes up 185.21 points at 11,635.85
* Resources, financials lead rise
* China exports surge almost 50 percent
* ECB announces extra liquidity for banks (Adds details, quotes, fall in gold stocks)
By Claire Sibonney
TORONTO, June 10 (Reuters) - Toronto’s main stock index closed sharply higher on Thursday, led by its heavyweight resource and financial sectors, as European Central Bank moves and a leap in Chinese exports brightened sentiment and boosted the demand outlook for commodities.
Official data showed Chinese exports jumped 48.5 percent in May from a year earlier, well above forecasts for a 32 percent gain and confirming a Reuters report from Wednesday. [ID:nTOE65901X]
The price of oil rose more than $1 to above $75 a barrel as the solid Chinese figures and a rosier demand forecast by the International Energy Agency attracted buyers, lifting the TSX index’s powerhouse energy group 2.3 percent. [O/R]
“There’s been a lot of concern about China for a while and that clearly makes the case for commodities,” said Jean-Francois Dion, vice-president and portfolio adviser for Canadian equities at RBC Dominion Securities.
Financials, which have been lagging recently, gained 1.6 percent after the European Central Bank said it would provide unlimited liquidity to banks until the end of this year and kept rates on hold, while pressing on with its policy of buying euro government bonds. [ID:nLDE6590CW]
“For financials, it’s the upbeat tone in Europe. The European Central Bank press conference today was actually a little better than expected,” Dion said.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed 185.21 points, or 1.6 percent, higher at 11,635.85. All of the 10 main groups were higher.
“It’s a very broad-based strength off a market that was very clearly oversold,” Dion said.
Copper prices firmed on expectations of higher Chinese demand, pushing the TSX’s base-metal subsector up 4.8 percent. First Quantum Minerals (FM.TO) shot up almost 8 percent to C$55.44, while Teck Resources TCKb.TO jumped 5.3 percent to C$34.19. [MET/L]
Fertilizer producers also helped lift the broader materials sector, with Potash Corp (POT.TO) ahead 3.7 percent at C$103.54 and Agrium (AGU.TO) up 3.4 percent at C$54.87 as corn futures moved higher on bullish data in the latest U.S. Department of Agriculture crop report. [ID:nN10226987]
Earlier in the day market players were skeptical that the TSX had what it takes to close decidedly higher after a recent trend of hard selloffs toward the end of the day.
“We need to find some staying power ... We need to see some consistency in the information, and so far that hasn’t been the case,” said Fred Ketchen, director of equity trading at ScotiaMcLeod.
North American economic data was mixed. In Canada, new home prices in April rose but the trade surplus for the month was smaller than expected. [ID:nN10210970]
In the United States, weekly unemployment figures fell less than forecast, while the trade deficit widened slightly in April, pointing to a moderate economic recovery. [ID:n09208728]
But with seasonal trading volumes low, Dion said the day’s sharp rise was promising.
“It’s hard to know if there’s much conviction behind this move given how oversold the market was but, yes, I think it sets the tone hopefully for a more positive few days here.”
Gold-mining stocks, however, were 0.2 percent lower as the price of the safe-haven precious metal softened from a recent record high on rebounding risk appetite.
$1=$1.03 Canadian Reporting by Claire Sibonney; editing by Peter Galloway