UPDATE 1-Toronto stocks soar on central bank rescue effort

Thu Sep 18, 2008 10:24am EDT
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*TSX rallies after central banks inject liquidity

*Financial services sector up 4.4 percent

*Energy stocks spike as oil rises to $100 a barrel

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TORONTO, Sept 18 (Reuters) - The Toronto Stock Exchange's main index soared on Thursday morning after central banks around the world poured in $180 billion in extra liquidity to calm markets made jittery by the mayhem on Wall Street.

The rally reversed a nearly 3 percent tumble on Wednesday, when the Toronto index dipped into bear-market territory, down 21 percent from its June 18 peak.

The central bank injection [ID:nSP129521] comes after the U.S. government earlier this week rescued insurer American International Group (AIG.N: Quote) with an $85 billion loan to stave off its bankruptcy, a move that was met with trepidation as investors worried the bailout wouldn't be enough to stem the financial turmoil. [ID:nN13574113]

Shortly after the open, the S&P/TSX composite index .GSPTSE was up 476.71 points, or 4 percent, at 12,354.40, with all of its 10 main groups higher.

The heavily-weighted financial services sector rose 4.4 percent with Sun Life Financial (SLF.TO: Quote) up 3.7 percent to C$37.08.   Continued...