CANADA STOCKS-TSX rebounds as European debt concerns ease

Wed Sep 7, 2011 4:59pm EDT
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 * TSX up 202.02 points, or 1.61 percent, at 12,720.56
 * All 10 sectors higher, energy leads gains
 By Trish Nixon
 TORONTO, Sept 7 (Reuters) - Toronto's main stock market
index snapped a three-day losing streak on Wednesday as
sentiment turned after Germany's top court cleared the way for
Berlin to contribute more to the euro zone's rescue fund.
 European stocks bounced back from a two-year low after the
court rejected lawsuits aimed at blocking the country's
participation in aid to Greece and other nations, giving relief
to investors after this week's sharp sell-off in risk assets.
 "Stocks are pretty well oversold ... At this point, where
valuations are, anything other than a recession in the U.S. is
probably going to be bullish for equities," said Robert Kavcic,
economist at BMO Capital Markets.
 Beaten-down energy stocks rallied to lead the index's
gains, jumping 2.4 percent as oil rose to a five-week high.
 Suncor Energy (SU.TO: Quote) was the most heavily weighted gainer,
up 3.7 percent at C$30.36, while Canadian Natural Resources
(CNQ.TO: Quote) added 3.2 percent to C$35.66.
 "Other than financials we are seeing cyclicals carry most
of the strength today," Kavcic said.
 "For the past three or four months we've seen defensive
sectors outperform pretty significantly, as economic growth
expectations have been ratcheted down. Today we are seeing a
little bit of the opposite."
 Financial issues also recovered some of their recent
losses, rising 1.7 percent. Royal Bank of Canada (RY.TO: Quote)
climbed 1.8 percent to C$49.07, while Bank of Nova Scotia
(BNS.TO: Quote) jumped 2 percent to C$53.25.
  The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed up 202.02 points, or 1.61 percent, at
12,720.56. All ten of the index's main sectors were higher.
 "The market is hopeful that this will be a turnaround
week," said Barry Schwartz, vice president and portfolio
manager at Baskin Financial Services.
 "Dramatic, quick and decisive action needs to be taken on a
number of issues; jobs, debt and growth. The market is feeling
like if some of these things come together, the valuations on
stocks are so cheap and interest rates are so low, that we
could be set up for an explosive rally."
 U.S. President Barack Obama is due to lay out a
job-creation package on Thursday and G7 finance ministers and
central bankers meet in Marseilles, France this weekend to
discuss measures to boost global economic growth.
 (Editing by Jeffrey Hodgson)