CANADA STOCKS-TSX surges on central bank optimism, Potash

Thu Jul 23, 2009 5:20pm EDT
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 * TSX ends up 2.33 percent at 10,675.68
 * Bank of Canada says recession ends this quarter
 * Canpotex deal pushes Potash Corp shares 7 pct higher
 * Financials up 2.83 percent on economic outlook
 (Adds details, quote)
 By Ka Yan Ng
 TORONTO, July 23 (Reuters) - A declaration by the Bank of
Canada that the country's recession is almost over helped
propel Toronto's main stock index to its highest level in
nearly six weeks on Thursday.
 The central bank said Canada will pull out of recession
during this quarter and also that the world economy has likely
averted a worst-case scenario and is bottoming out.
 "They seem to think the worst is behind us and perhaps
better times are ahead. The market usually anticipates the
economy four to five months ahead," said Bruce Latimer, a
trader at Dundee Securities.
 Firm oil and metals prices also encouraged big gains in the
index's resource sectors, with the energy group advancing 2.94
percent and the materials group rising 2.25 percent.
 Top gainer Potash Corp POT.TO shot 7.27 percent higher to
C$104.59 as the fertilizer producer announced that Canpotex,
the marketing unit for Potash, Mosaic Co MOS.N and Agrium Inc
AGU.TO, will sell potash to India at $460 a tonne.
 That lifted a market mood that had been sour on the outlook
for global fertilizer prices, spurring investors to look past
Potash's almost 80 percent drop in second-quarter profit and
its cut in its full year financial forecast.
 The financial sector, which accounts for about a third of
the TSX index, jumped 2.83 percent, boosted by the Bank of
Canada's assessment and by better than expected corporate
earnings in the United States.
 "The way I look at it is that all of a sudden people...will
stop saying the glass is half empty. It's half full," said Ian
Nakamoto, director of research at MacDougall, MacDougall &
 The S&P/TSX composite index .GSPTSE closed up 243.33
points, or 2.33 percent, at 10,675.68, its highest level since
June 12.
 Six of the top 10 heavyweight gainers were from the index's
financial sector. Manulife Financial MFC.TO was up 4.89
percent at C$23.82, and Toronto-Dominion Bank TD.TO was up
3.13 percent at C$61.69. Royal Bank of Canada RY.TO, Sun Life
Financial SLF.TO, CIBC CM.TO and Bank of Nova Scotia
BNS.TO also made healthy gains.
 In other sectors, independent energy producer Canadian
Natural Resources CNQ.TO was up 5.13 percent at C$63.68,
while BlackBerry smartphone maker Research In Motion RIM.TO
rose 3.35 percent to C$83.29.
 Nine of the index's 10 main groups were higher, with five
sectors notching gains of 2 percent or more.
 The lone decliner was the consumer staples group, which
fell 0.62 percent. Shoppers Drug Mart SC.TO was the biggest
index loser, down 3.92 percent at C$45.40. Desjardins
Securities cut its rating on Canada's biggest pharmacy chain to
"hold" from "buy", a day after the company reported higher
quarterly profit that matched expectations. [ID:nBNG257671]
 ($1=$1.09 Canadian)
 (Additional reporting by Nina Lex; editing by Peter Galloway)