CANADA STOCKS-TSX rallies on resource strength

Tue Jul 20, 2010 4:42pm EDT
 
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* TSX up 86.41 points, or 0.75 percent, at 11,629.88

* Seven of TSX's 10 main groups higher (Updates to close, adds quote)

By Jennifer Kwan

TORONTO, July 20 (Reuters) - Toronto's main stock index ended higher on Tuesday as commodity prices rose on renewed optimism for China's economic strength, which helped boost the TSX's heavily weighted resource issues.

The TSX's materials sector, up 1.5 percent, led the rally [GOL/] [MET/L], with Barrick Gold (ABX.TO: Quote) up 0.7 percent at C$43.72, Potash Corp of Saskatchewan (POT.TO: Quote) up 1.6 percent at C$102.54 and Teck Resources (TCKb.TO: Quote) ahead 3.7 percent at C$34.31.

Market observers said the TSX was influenced by the Shanghai composite index .SSEC, which rose 2 percent to its highest close in three weeks, buoyed by property stocks, as investors gained confidence that Beijing's property policy would hold steady for the rest of the year after a series of tightening steps. [MKTS/GLOB]

"That's very positive for commodity markets and, by extension, the TSX composite," said Fergal Smith, managing market strategist at Action Economics.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished the day up 86.41 points, or 0.75 percent, at 11,629.88, with seven of its 10 main groups higher.

Firm oil prices also helped boost the resource-laden index, with the energy sector gaining 1.1 percent. Suncor Energy (SU.TO: Quote) climbed 1.8 percent to C$33.13, while Encana Corp (ECA.TO: Quote) rose 2.2 percent to C$34.49. [O/R]

Elsewhere, the Bank of Canada raised its key interest rate, as expected, but cautioned that the domestic and global economic recovery would be slower than previously expected. [ID:nN20251478] [ID:nN20190202]

($1=$1.04 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)