CANADA STOCKS-China stimulus pushes TSX up, Nortel sags

Mon Nov 10, 2008 10:16am EST
 
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* China stimulus package lifts equities, commodities

* Nortel cuts 1,300 jobs, posts loss; shares drop 17 pct

* Energy, materials lead index higher

TORONTO, Nov 10 (Reuters) - The Toronto Stock Exchange's main index rose 2.9 percent on Monday morning in line with other world markets, boosted by the big stimulus package announced by China on the weekend.

Global stock and commodity markets surged in reaction to China's plan to spend nearly $600 billion on stimulating its economy as G20 finance ministers pledged on the weekend to take measures to fight global recession and revive financial markets.

"That's put a nice bit in the teeth for commodities and that obviously spills right over into Canada with our large exposure to commodities," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

"That's what the market needs, a sense of global coordination, not only lowering interest rates but also a fiscal plan."

The energy and materials groups led the broad advance, up 4.98 percent and 5.96 percent respectively, as oil moved above $64 a barrel and gold and copper gained.

Shortly after 10 a.m. (1500 GMT), the S&P/TSX composite index .GSPTSE was up 275.93 points, or 2.9 percent, at 9,872.14. All but one of the index's 10 main groups were higher.

Nortel Networks Corp NT.TO fell nearly 17 percent to C$1.24 as North America's biggest maker of telephone gear reported a large quarterly loss and announced a round of sweeping cost-cutting that includes laying off 1,300 more people. [ID:nN10442062] ($1=$1.19 Canadian) (Reporting by Ka Yan Ng; Editing by Peter Galloway)