UPDATE 2-Toronto stocks rise sharply as rate cuts eyed
(Adds details, analyst comment)
By Jonathan Spicer
TORONTO Jan 24 (Reuters) - The main index of the Toronto Stock Exchange climbed sharply on Thursday morning, lifted by higher commodity prices, the prospect of more interest rate cuts, and strong profits at Potash Corp of Saskatchewan (POT.TO: Quote).
The S&P/TSX composite index .GSPTSE was off early highs by late morning, but still up 210.52 points, or 1.7 percent, at 12,867.92. Nine of the index's 10 main sectors were up, with materials stocks leading the charge.
In its Monetary Policy Report Update on Thursday morning, the Bank of Canada strongly hinted more interest rate cuts were on the horizon, boosting market sentiment.
Investors also cheered reports that New York state regulators were meeting battered U.S. bond insurers to hammer out a plan that could ease the credit crisis.
Recently-depressed commodity prices benefited as worries over a U.S. recession eased, which in turn lifted the resource-heavy TSX.
Meanwhile, shares of Potash Corp soared more than 5 percent after the world's biggest fertilizer producer reported a doubling of fourth-quarter profit, beating expectations. For details, see: [nL24902402]
Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, said much of the index's rise could be attributed to a short-covering rally, where investors buy stocks to replace those that were borrowed earlier for a short sale. Continued...