CANADA STOCKS-TSX hits 6-week high on Petro-Canada, US bank plan

Mon Mar 23, 2009 4:59pm EDT
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* TSX jumps 452.16 points to 8,958.51

* Petro-Canada takeover buoys energy shares

* U.S. bank plan cheered by investors (Adds details, comments and official numbers)

By Frank Pingue

TORONTO, March 23 (Reuters) - Toronto's main stock index surged more than 5 percent on Monday to its highest close in six weeks as a massive takeover of Petro-Canada PCA.TO and a U.S. plan to rid banks of toxic assets helped boost sentiment.

Energy shares raced higher as the price of oil, a key Canadian commodity, hit a three-month high, while Suncor Energy Inc SU.TO agreed to buy rival Petro-Canada for C$18.43 billion. [ID:nN22497404]

Shares of Petro-Canada PCA.TO, a key contributor to the Toronto market's gain, soared 20.4 percent to C$35.70, while EnCana Corp ECA.TO jumped 8 percent to C$55.50.

Another key factor behind the gains was the U.S. plan to buy up to $1 trillion in toxic financial assets, a move that will be critical to hopes for a U.S. economic recovery. [ID:nSP429491]

"This is the most credible plan I've seen from the U.S. Treasury to date and it looks like the private sector and the stock market is buying into it," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. "For me, this is some validation that there is some meat on the bones here."   Continued...