UPDATE 3-Toronto stocks get big boost from rate cuts

Tue Jan 22, 2008 4:58pm EST
 
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(Updates with official closing number, adds detail)

TORONTO Jan 22 (Reuters) - The Toronto Stock Exchange's main index climbed more than 500 points on Tuesday, ending a five-day plunge, after Canada and the United States cut interest rates to calm worries over the global economic outlook.

In a broad-based advance led by the materials, energy and financial sectors, the index regained more than two-thirds of Monday's losses, while investors took advantage of the beaten-down prices.

But the index remained at near lowest level in a year after a nosedive sparked by intensifying fears over the prospect of a U.S. recession and what that could mean for global growth.

The S&P/TSX composite index .GSPTSE closed up 508.76 points, or 4.19 percent, at 12,640.89 with all of its 10 sectors on the upside.

Fairfax Financial Holdings (FFH.TO: Quote) and Research In Motion RIM gave the market its biggest boost, rising C$10.75, or 3.8 percent, to C$296.40, and C$8.78, or 10.4 percent, to C$93.28 respectively.

The materials sector gained 8.4 percent, while the subsector of gold producers soared 7.5 percent. Barrick Gold (ABX.TO: Quote) was up C$4.78, or 10.3 percent, at C$51.25, while Kinross Gold (K.TO: Quote) rose C$3.01, or 15.3 percent, to C$22.67.

The energy and financials sectors added 2.8 percent and 3.7 percent respectively. Petro-Canada PCA.TO moved up 75 Canadian cents, or 1.6 percent, to C$46.90, and Bank of Montreal (BMO.TO: Quote) C$2.24, or 4.4 percent, to C$53.64.

An emergency interest rate of 75 basis points from the U.S. Federal Reserve, closely followed by a cut of 25 basis points from the Bank of Canada gave the Toronto benchmark a shot in the arm and helped it climb out of a five-session rout.

The freefall that begain last Tuesday knocked 1,566.15 points, or 11.4 percent, off the index. The dive was capped off by a more than 600-point plunge on Monday, the biggest one day drop in more than seven years.

($1=$1.03 Canadian) (Reporting by Leah Schnurr)