CANADA STOCKS-TSX has biggest jump in seven weeks

Wed Nov 30, 2011 1:31pm EST
 
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   * TSX up 308.94 pts, or 2.6 pct, at 12,041.44
 * TSX on course for biggest jump since Oct. 6
 * Central banks move to ease market liquidity
 * China cuts bank reserves in policy shift
 (Adds details, analyst comments)
 By Jon Cook
 TORONTO, Nov 30 (Reuters) - Toronto's main stock index hit
a seven-week high on Wednesday, up more than 2.5 percent at
midday as resource issues jumped on an agreement by global
central banks to tackle the euro zone debt crisis and a move by
China to ease credit strains.
 Commodity prices, particularly for oil, gold and base
metals, rose on renewed investor optimism for the global
economy, lifting the TSX's heavily weighted materials sector by
nearly 4 percent. [ID:nN1E7AT0GX]
 The 19-commodity Thomson Reuters Jefferies CRB index .CRB
was up nearly 1 percent on the day, but was still on course to
finish November with a 2 percent loss after a dismal
performance in the first three weeks of the month.
 In Toronto, shares of miner Goldcorp (G.TO: Quote) were up 5.4
percent at C$53.98, and Barrick Gold (ABX.TO: Quote) gained 2.8
percent to C$52.90, leading the gold subsector's rise. The
gains came as bullion prices climbed more than 2 percent in
response to a falling U.S. dollar as central banks moved to
inject more liquidity into the global financial system.
[ID:nL5E7MU118]
 At 1:04 p.m. (1804 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was up 308.94 points, or 2.6
percent, at 12,041.44. It was the index's biggest rise since
Oct. 6.
 The move by the TSX index mirrored hefty gains on other
global markets as central banks from the world's leading
economies, including the Bank of Canada, the U.S. Federal
Reserve and the European Central Bank, agreed to lower the cost
of dollar swap lines by 50 basis points, as well other
measures. [ID:nN9E7LI02P]
 "Santa has come early and he happens to look a lot like
(U.S. Federal Reserve Chairman) Ben Bernanke, right down to the
beard, and in his bag he has lots and lots of U.S. dollars
available to exchange for euros in unlimited amounts," said
Gavin Graham, president of Graham Investment Strategy.
 "All the risk assets, whether it's gold or copper or oil or
the Canadian dollar, are all shooting up and it's likely that
we'll see a continuation of that (for the rest of the year),"
Graham said.
 Oil and gas issues continued their recent rally, jumping
more than 3 percent as U.S. crude rose above $100 a barrel to
its highest level in two weeks.
 Suncor Energy (SU.TO: Quote) jumped 4.4 percent to C$30.52 to lead
energy gains. Canadian Natural Resources (CNQ.TO: Quote) was also
strong, rising 3 percent to C$37.46.
 The global rally started early in the day when China's
central bank moved to ease credit strains by cutting reserve
requirements for its commercial lenders by 50 basis points, the
first such drop in nearly three years. [ID:nL3E7J51YT]
 The move, which is expected to free up funds that could be
used for lending to cash-strapped small firms, came as China's
economic growth has eased for three straight quarters due to
tight credit at home and flagging demand overseas.
 As well as the Chinese shift to an easier policy and the
move by central banks, strong U.S. jobs data and better than
expected Canadian third-quarter economic growth all helped
boost market sentiment. The U.S. figures showed the private
sector added more than 200,000 jobs in November.
[ID:nN1E7AS1R7] [ID:nN1E7AT05Q]
 Canadian equities markets were "internally very oversold"
over the last 10 days as worries about European debt contagion
led to repeated selloffs, said Sid Mokhtari, market technician
and director, institutional equity research, CIBC World
Markets.
 "You just needed a cause and you've got the catalyst this
morning from China and from the coordinated effort of all the
central bankers," Mokhtari said. "They needed to give it a jolt
and they did, and the market's responding accordingly."
 The TSX financial sector, which has little direct exposure
to European debt assets, had its best jump in a month, rising
2.4 percent on the strengthened European outlook.
 Royal Bank of Canada (RY.TO: Quote) led the way, gaining 3 percent
to C$46.38.
 The TSX might have risen higher if not for a technical
glitch in the morning that froze trading of companies whose
symbols started with the letters M to Z. The problem affected
high-volume stocks such as Research In Motion RIM.TO and Sun
Life Financial (SLF.TO: Quote). [ID:nL1E7MU0WH]
 In individual company news, TMX Group (X.TO: Quote) was down 2.8
percent to C$43.48 after the federal competition regulator said
it has "serious concerns" about a C$3.8 billion proposal by
Maple Group consortium to take over TMX, owner of the Toronto
Stock Exchange.
 ($1=$1.02 Canadian)
 (Editing by Rob Wilson; editing by Peter Galloway)