UPDATE 2-Toronto stocks' huge gain halved by midmorning

Tue Oct 14, 2008 11:42am EDT
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* Investors cheer U.S. plan to plow $250 bln into banks

* Index up 1,600 points at open, biggest one-day gain

* Financials, oil and gas groups lead (Adds details, analyst's comments)

By Ka Yan Ng

TORONTO, Oct 14 (Reuters) - The Toronto Stock Exchange's main index was strongly higher at midmorning on Tuesday but well off the record-breaking gain it made at the start of trading as it played catch-up with Monday's monster surge on Wall Street and welcomed a U.S. plan to inject $250 billion into banks.

Canadian markets were closed on Monday for Thanksgiving Day.

The Toronto index raced up more than 1,600 points shortly after the market open, its biggest intraday gain ever, following big gains on world stock markets on Monday and continuing strength on Tuesday as investor jitters about the stability of the financial system eased.

The U.S. plan to plow $250 billion into its banks, following similar measures in Europe, is designed to get them lending to each other again. [ID:nTRS000084]

Shortly after 11:00 a.m. (1500 GMT), the S&P/TSX composite index .GSPTSE was up 877.37 points, or 9.68 percent, at 9,942.53. All 10 sectors were higher. Right after the open the index was up a record-breaking 18 percent, and recovered all its gains from last week's slump in mere minutes.   Continued...