UPDATE 1-Toronto stocks up 230 points on cenbank action

Tue Mar 11, 2008 11:04am EDT
 
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(Adds details, analyst)

By Jonathan Spicer

TORONTO, March 11 (Reuters) - The Toronto Stock Exchange's main index shot out of the starting gate on Tuesday, emboldened by a joint plan by the Bank of Canada and other central banks to inject liquidity into faltering world credit markets.

Canadian banks, which have lagged the overall TSX so far this year, led the charge with heavyweights Royal Bank of Canada (RY.TO: Quote) and Bank of Nova Scotia (BNS.TO: Quote) logging big gains.

Materials and energy shares also jumped, partly due to bullish commodity prices.

"Central banks have shown us that they will step up to the plate in order to alleviate some of the concerns," said John Ing, president of Maison Placements Canada.

The S&P/TSX composite index .GSPTSE rose 236.62 points, or 1.8 percent, to 13,241.71, regaining much of the previous session's steep decline.

U.S. and European equities also climbed after the Federal Reserve said it would work in tandem with other central banks to prop up credit markets, and accept a broader range of securities as collateral. For details, see: [nN11554482] and [nN11555322]

"The fact is that these steps are band-aids that reassure in the short term but do not resolve the central need for Americans to recapitalize their financial markets," Ing said.   Continued...