(Updates to midday)
TORONTO, March 24 (Reuters) - The Toronto Stock Exchange’s main index surged more than 300 points on Monday in an across-the-board rally led by a strong bounce in resource and bank shares.
Investors picked up shares that were battered down by a sharp selloff in commodities the previous week due to deepening worries over more fallout from the credit crunch.
A rebound in resource stocks led the way up on Monday, with the energy and materials sectors gaining 2.2 percent and 2.4 percent respectively.
“(In) the big runup we had in energy prices, we did not see a similar rise in energy equities,” said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.
“So, even if we get some firming of oil prices at levels well above the $75 that a lot of analysts are using as their long-term strategy for oil, then there’s good value in the sector.”
The S&P/TSX composite index .GSPTSE was up 319.67 points, or 2.5 percent, at 13,095.31 at midday with all 10 of its main sectors higher. It lost more than 3 percent the previous week.
The banking sector gained 3.3 percent as investors saw value in stocks that have been beaten down by concerns over troubles in financial markets.
Bank of Montreal (BMO.TO) continued its upward momentum after it said last week it had reached a deal to restructure two of its commercial paper trusts. BMO rose C$2.23, or 5 percent, to C$46.74, and Canadian Imperial Bank of Commerce (CM.TO) was up C$3.06, or 4.8 percent, at C$67.32.
Taylor said the banks were also benefiting from news that that JPMorgan Chase & Co (JPM.N) has raised its offer for Bear Stearns Cos BSC.N to about $10 a share from the fire-sale price of $2 that was originally offered.
“(It) is a sign that obviously they are recognizing that there was more significant value than their low-ball bid of $2,” Taylor said.
Elsewhere, Biovail Corp BVF.TO was down 48 Canadian cents, or 4.1 percent, at C$11.30 after the U.S. Securities and Exchange Commission charged the company with engaging in a number of fraudulent accounting schemes. Two current senior executives and former Chief Executive Eugene Melnyk were also charged.
$1=$1.02 Canadian Reporting by Leah Schnurr; Editing by Peter Galloway