June 21, 2011 / 8:46 PM / in 6 years

CANADA STOCKS-TSX surges 1.6 pct in biggest gain since March

   * TSX ends up 205.62 points, or 1.6 pct, at 13,063.32
 * Materials, energy, financials all higher
 * Hopes rise for resolution to Greek debt crisis
 * Sino-Forest sinks 27 pct
 * RIM jumps 9 percent  (Updates to close, adds details, quotes)
 By Claire Sibonney
 TORONTO, June 21 (Reuters) - Toronto’s main stock index ended sharply higher on Tuesday, posting its biggest one-day gain in three months on the back of stronger commodity prices that rose on hopes for a deal to resolve Greece’s debt crisis
 Consensus grew that Prime Minister George Papandreou would survive a confidence vote, the first of three tests the Greek government must survive to avert the euro zone’s first sovereign default. The vote is due around 5 p.m. EDT (2100 GMT). [ID:nL3E7HL0BG]
 The optimism whetted investor appetite for riskier assets and drove global stocks and commodity prices higher. [MKTS/GLOB]
 “The market is discounting the fact that the Greek prime minister will survive tonight’s confidence vote, so a relief rally on the back of that,” said Fergal Smith, managing market strategist at Action Economics.
 He warned however that market players were talking about Tuesday’s bounce being a low-volume, rally and whether it could be sustained.
 Materials and energy issues rose 3.1 percent and 1.8 percent respectively. The two groups together make up about half of the TSX index.
 Potash Corp (POT.TO) was the most influential gainer on the index, building on the previous session’s advance as it rose 3.5 percent to C$52.38. Canadian Natural Resources (CNQ.TO) was close behind, climbing 3.5 percent to C$39.15, while Teck Resources TCKb.TO surged 5.2 percent to C$45.47.
 Toronto-Dominion Bank (TD.TO) gave the strongest showing among banks, rising 1.6 percent to C$80.17.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 205.62 points, or 1.6 percent, at 13,063.32.
 It was the biggest one-day gain since March 21. Nine of the TSX’s 10 main groups were higher. Health care stocks were down 0.9 percent.
  Smith said significant near-term resistance would be found around the 200-day moving average, which sits just below 13,300.
 “Temporarily, it looks like we’ve hit a bottom here, because bad news is being somewhat forgiven and good news is being treated pretty heartily,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. Though he also cautioned that the confidence may not last long.
 “Something else could hit us over the head and we’re back down. But, having said that, it’s better than if we keep going down, down, down.”
 Among the decliners, EnCana (ECA.TO) was the biggest weight on the index, falling 1.4 percent to C$29.06. The company called off a proposed C$5.4 billion deal to sell half its holdings in a prolific shale gas region in British Columbia to PetroChina (601857.SS), saying it would seek new partners. [ID:nL3E7HL1HH]
 Sino-Forest TRE.TO was the second heaviest laggard, sinking 27 percent to C$1.99 after its biggest shareholder, billionaire hedge fund manager John Paulson, dumped his entire 14 percent stake in the company late Monday. [ID:nN1E75K0GB]
 Research In Motion RIM.TO, which has reportedly begun handing out layoff notices, jumped more than 9 percent to C$27.74 after falling more than 26 percent following Friday’s disappointing results and outlook.
 RIM’s recent sharp selloff has fueled speculation that the company is looking like a more attractive takeover target. [ID:nN1E75K04E]
 ($1=$0.97 Canadian)  (Additional reporting by Solarina Ho; editing by Rob Wilson)                                        

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