3 Min Read
* TSX recovers from year low hit in morning trade
* Infotech led by 10-pct jump in RIM
* Survey sees gold rising as high as $1,080/oz this year
* Nine of 10 groups advance (Updates to closing prices, adds details)
By Ka Yan Ng
TORONTO, Jan 15 (Reuters) - Toronto's main stock index closed strongly higher on Thursday, reversing early losses, as a rebound in U.S. stocks on optimism about government stimulus helped boost nearly all Canadian market sectors.
Earlier in the day, the resource-heavy index hit its lowest point this year, hurt by nagging concerns about a drop in oil demand, while banking shares also tumbled.
U.S. stocks also rebounded to trade higher, helped by hopes that Washington would mount action to aid banks, as a CNBC report said a government guarantee for Bank of America is to be between $100 billion and $200 billion.
The S&P/TSX composite index .GSPTSE finished 2.2 percent higher, up 191.25 points at 8,879.61. Nine of the index's 10 main groups advanced, with the exception of utilities.
"I guess one could attribute some of this just to bargain hunters coming in after a few down days here," said Michael Sprung, president at Sprung & Co. Investment Counsel.
"This morning the market was still suffering from the shock of Nortel and perhaps some of that has worn off as the day progressed."
Nortel Networks NT.TO was the most active issue for a second session in a row, the day after its shares fell as much as 79 percent on news the telecom equipment maker had filed for bankruptcy protection. It recovered on Thursday but gave up its gains by end of the session to finish 4.2 percent lower at 11.5 Canadian cents.
Research in Motion RIM.TO, up 10 percent at C$62, was the biggest mover, helping to boost the information technology group.
The materials group gained 4.3 percent, helped by the rising gold price. Barrick Gold (ABX.TO) rose 6.9 percent to C$42.06.
The price of gold should surge above last year's record levels, rising as high as $1,080 an ounce this year as government fiscal stimulus efforts undermine the greenback and set the stage for a sharp rise in inflation, precious metals consultancy firm GFMS said. [ID:nN15473985]
The oil and gas group also headed higher despite a drop in the price of crude. Oil prices slid more than 6 percent amid gloom about the health of the world economy, but shares of Canadian Natural Resources (CNQ.TO) and Suncor Energy (SU.TO) rebounded in the afternoon.
$1=$1.25 Canadian Additional reporting by Frank Pingue; editing by Jeffrey Hodgson