CANADA STOCKS-TSX surges on Greek hopes, ECB rate cut

Thu Nov 3, 2011 5:31pm EDT
 
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 * TSX up 226.59 points, or 1.9 percent, to 12,468.35
 * Optimism on Greece helps drive gains
 * Canadian Natural up 9 pct after earnings report
 * Analysts await U.S., Canadian jobs data
 (Adds financial sector details)
 By Jon Cook
 TORONTO, Nov 3 (Reuters) - Toronto's main stock index
closed up more than 1 percent on Thursday for a second straight
session, spurred by Greece's move to abandon a referendum on
the euro zone bailout plan and by a surprise interest rate cut
by the European Central Bank.
 Global market relief over the shift away from the
referendum, which had threatened to unravel the euro-zone's
plan to deal with the debt crisis, lifted oil and metals
prices, which helped pushed up the TSX index's resource
sectors. [MKTS/GLOB]
 "If there's no referendum then that suggests the plan that
the euro zone leaders put into effect last week will move
forward," said Kate Warne, Canadian market strategist at Edward
Jones in St. Louis, Missouri. "That clearly was taken as a
positive by the markets."
 Markets have been highly susceptible to large swings
recently as developments in the euro zone have quickly
overshadowed corporate earnings and global economic data.
 The ECB's surprise decision to cut its main interest rate
to help tackle the debt crisis also gave oil and gold prices a
lift as it promised to boost credit availability and brighten
prospects for commodity demand. [O/R] [GOL/] [MET/L]
 "That was a huge surprise," Warne said, adding it suggests
"the European Central Bank will now respond more appropriately
to conditions in Europe than what seemed to be the case over
the last few months.
 The TSX index's financial shares rose 0.8 percent. Bank of
Nova Scotia BNS.TO drove the sector, gaining 1.9 percent to
C$52.93.
 Manulife Financial MFC.TO shares rose 4.5 percent to
C$13.11 even though the life insurer reported a steeper than
expected loss in the third quarter. [ID:nN1E7A20B9]
 Sun Life Financial SLF.TO was among the biggest drags,
falling 4.8 percent to C$22.85 after it reported a sharp
third-quarter loss and said its earnings sensitivity to weak
financial markets was increasing. [ID:nN1E7A20LR]
 Nine of the index's 10 main sectors were higher, led by
energy issues, which were up more than 3 percent.
 Canadian Natural Resources CNQ.TO led the energy sector
higher, rising 9.3 percent to C$38.23. Suncor Energy SU.TO
was up 4.4 percent to C$33.20.
 Canadian Natural's quarterly profit rose 40 percent and
topped analyst expectations due to an increase in output and
higher crude prices. The country's No. 2 oil producer also
forecast a 17 percent production rise in 2012. [ID:nL4E7M31JS]
 The index's materials sector gained more than 2 percent,
aided by the higher base metal and gold prices. Barrick Gold
ABX.TO was the biggest gainer, rising 2.6 percent to
C$52.50.
 Overall, the Toronto Stock Exchange's S&P/TSX composite
index .GSPTSE finished up 226.59 points, or 1.9 percent, at
12,468.35. The TSX ended last week at 12,519.51, before
plunging nearly 5 percent to 11.913.72 this week on news of
Greece's referendum plan.
 A U.S. Institute for Supply Management report that showed
the vast U.S. services sector slowed modestly in October to its
lowest level in three months, produced a slight drag on
markets. [ID:nN1E7A20JG]
 Analysts had expected stronger ISM data, but were still
cheered by the employment component of the report, which rose
to its highest level since June.
 "It was actually pretty strong," said Robert Kavcic, an
economist with BMO Capital Markets. "It points to decent growth
and payrolls tomorrow."
 Both the United States and Canada report employment figures
for October on Friday. In Canada, analysts expect a 12,200 gain
in jobs and an unemployment rate of 7.1 percent. ECONCA
 In individual company news, shares of Yellow Media Inc
YLO.TO rose 28 percent to 44 Canadian cents after it posted a
14 percent rise in third-quarter profit. [ID: nL4E7M32VE]
 Valeant Pharmaceuticals VRX.TO rose more than 13 percent
to C$44.08 after the specialty drugmaker reported a quarterly
profit and said it would buy back up to $1.5 billion of its
stock or debt. [ID: nNN1E7A20BY]
 Magna International MG.TO shares fell 2.1 percent to
C$35.23 after it reported its earnings dropped sharply, partly
due to rising costs at its European operations.
[ID:nL4E7M31OM]
 ($1=$1.01 Canadian)
 (With additional reporting by Claire Sibonney; Editing by
Jeffrey Hodgson and Peter Galloway)