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

Tue Jun 21, 2011 4:50pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

   * 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
 (Adds U.S. debt ceiling talks, Fed meeting Wednesday)
 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
 The optimism whetted investor appetite for riskier assets
and drove global stocks and commodity prices higher.
 "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: Quote) 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: Quote) 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: Quote) gave the strongest showing
among banks, rising 1.6 percent to C$80.17.
 Smith noted that progress on the debt ceiling talks in the
United States was also positive for the market, as well as
signs that U.S. vehicle assembly has been recovering faster
than anticipated, which supported the view that growth will
rebound in the second half of the year. [ID:nN1E75K13N]
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended up 205.62 points, or 1.6 percent, at
 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
 "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: Quote) 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: Quote), saying it would seek new partners.
 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.
 Looking ahead to Wednesday, the market will shift its focus
to the second day of the Federal Open Market Committee's
meeting, with a news conference by Federal Reserve Chairman Ben
 The U.S. central bank is expected to cut its growth
forecast for 2011, but Bernanke will likely continue to argue
the slowdown is temporary and offer no hints at a third round
of quantitative easing. [FED/AHEAD]
 ($1=$0.97 Canadian)
 (Additional reporting by Solarina Ho; editing by Rob Wilson)