August 27, 2010 / 8:33 PM / in 7 years

CANADA STOCKS-TSX gains as Fed comments ease economic jitters

* TSX up 226.54 points, or 1.94 percent, at 11,879.72

* Fed’s Bernanke says will act to spur growth if needed

* Index gains 1.3 percent for the week (Updates to close, adds quote)

By Jennifer Kwan

TORONTO, Aug 27 (Reuters) - Toronto’s main stock index notched its steepest one day gain in just over 10 weeks on Friday, led by strong resource and financial issues, after Federal Reserve Chairman Ben Bernanke said the U.S. central bank was ready to take further steps to aid the recovery.

Bernanke, in an address to an annual conference of global central bankers hosted by the Fed, downplayed concerns that the company might slip back into recession. [ID:nN27259859]

But investors were pleased that the central bank chairman said the Fed is prepared to do all that it can to ensure economic recovery, said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

“That comment is basically reassuring that the Fed’s going to step in and help out in whatever way they can should the economy continue weaken,” he said.

The TSX index climbed sharply, led by its three main sectors: energy, financials and materials. The resource-laden market was also supported by strong oil and base metal prices. [O/R] [METL/]

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished the day up 226.54 points, or 1.94 percent, at 11,879.72, with all of its 10 main sectors higher.

It was the steepest one day percentage gain for the index since June 15. The TSX rose 1.3 percent for the week.

Some of the influential names on the upside included Suncor Energy (SU.TO), up 1.7 percent to C$32.70, and Royal Bank of Canada (RY.TO), which climbed 3 percent to C$50.40. Teck Resources TCKb.TO was higher by 4.6 percent at C$35.11.

The big issue that has been weighing on markets recently has been the idea that the U.S. economy will grow very slowly, or even see a double-dip recession, said Julie Brough, vice-president at Morgan Meighen & Associates.

“The fact that he’s basically putting out there that they will keep priming the pump as long as they need to, and as aggressively as they need to, takes away some of those fears of a double dip or a very slow period economically,” she said.

Even before Bernanke’s comments, however, the TSX had risen on revised quarterly growth figures that showed the U.S. economy was performing better than anticipated. [ID:nN26193565]

$1=$1.05 Canadian Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson

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