October 27, 2011 / 8:55 PM / 6 years ago

CANADA STOCKS-TSX jumps to near two-month high on Europe deal

4 Min Read

 * TSX closes up 279.38 pts, or 2.3 pct to 12,465.44
 * Biggest single-day gain in more than two weeks
 * Financials, energy sectors lead gains
 * First Quantum Minerals soars 14.2 pct
 By Jon Cook
 TORONTO, Oct 27 (Reuters) - Canadian stocks soared more than 2 percent on Thursday to their highest level in nearly two months, buoyed by optimism over a long-awaited deal by European leaders to tackle the region's debt crisis.
 The agreement brokered by European policymakers included a plan to leverage the euro zone's bailout fund to 1 trillion euros, a 50 percent haircut for private holders of Greek debt and bank recapitalization. [MKTS/GLOB]
 While the news was cheered by the markets, analysts were guarded about the sustainability of the rally.
 "There's a lot of hard sledding yet to go and the devil is always in the details, but the broad outline of this is pretty positive," said Robert Gorman, chief portfolio strategist at TD Waterhouse. "I'm sure we'll have some backing and filling here, but I suspect we will move higher."
 Financial stocks, up 2.8 percent, played the biggest role in leading the market higher. Canadian banks have traded in sympathy with European lenders for much of the crisis even though they have little or no exposure to Greece.
 Royal Bank of Canada (RY.TO) did the most to lead the financial sector higher, posting a 3.1 percent gain to C$49.66.
 The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 279.38 points, or 2.3 percent, at 12,465.44. It hit a session high of 12,526.29, its strongest level since Sept. 9. It was the market's biggest one-day gain in more than two weeks.
 Energy stocks, up 3 percent, were also a major driver. Oil rallied more than 4 percent as the European deal and supportive U.S. data eased concerns that economic weakness could curb energy demand. [O/R]
 Shares of Suncor Energy Inc (SU.TO), up 4.9 percent at C$32.80, led the sector and market higher.
 A 7.7 percent rally in base metal miners also help drive the influential materials sector higher, as copper prices jumped on the European news. [MET/L]
 Teck Resources TCKb.TO led the sector, gaining 8.1 percent to C$40.35 after news its third-quarter net income more than doubled, driven by strong results from its coal and copper businesses. [ID:nN1E79P2GI]
 First Quantum Minerals (FM.TO) was also among the biggest gainers, jumping 14.2 percent to C$21.24.
 After reporting a doubling in its third-quarter profit, Potash Corp (POT.TO) shares were up 1.4 percent to C$50.46, as strong grain prices boosted demand for the world's top fertilizer maker's products. [ID:nN1E79P2GK]
 Fellow miner Barrick Gold (ABX.TO) climbed 0.9 percent to C$48.61, after reporting a 45-percent increase in its quarterly profit, driven by a sharp increase in bullion prices. [ID:nN1E79P2GN]
 In other Canadian company news, BlackBerry maker Research In Motion Ltd's RIM.TO shares rose 1 percent to C$21.10, a day after plunging nearly 8 percent.
 RIM lagged the broader rally after it was hit by a class action lawsuit filed by consumers in the U.S. and Canada for a days-long service outage earlier this month. ID:nN1E79Q0QH]
 Solid U.S. economic news contributed to the market's euphoria, as data showed third-quarter GDP growing at its fastest pace in a year. [ID:nN1E79Q0FK]  (Editing by Jeffrey Hodgson)                 

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