CANADA STOCKS-TSX soars on Petro-Canada deal, US asset plan

Mon Mar 23, 2009 10:18am EDT
 
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* TSX up 3.38 percent at 8,793.72

* Petro-Canada shares surge 23 pct on Suncor deal

* Financial sector rises 4 percent (Adds details, quotes)

By Jennifer Kwan

TORONTO, March 23 (Reuters) - Toronto's main stock index rose sharply on Monday morning on optimism over a U.S. plan to purge banks of toxic assets and news that Suncor Energy SU.TO is set to buy rival Petro-Canada PCA.TO.

The energy sector, up 6.4 percent, led the TSX higher as Petro-Canada shares soared 23 percent to C$36.59 on news of its C$18.4 billion, all-share deal to be taken over by Suncor, creating Canada's largest oil company. [ID:nN22497404]

Suncor shares fell briefly at the opening bell and then rose 3.4 percent to C$31.96.

Financial stocks were up 4 percent on news of a U.S. plan to buy up to $1 trillion worth of toxic assets from banks, a key element of Washington's drive to pull the economy out of recession. [ID:nSP449612]

"Clearly, the market is taking it as good news," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.   Continued...