UPDATE 1-Toronto stocks rally as bailout hopes revive

Tue Sep 30, 2008 10:28am EDT
 
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*TSX rallies after nearly 7 percent drop on Monday

*Energy sector climbs 3 percent as oil recovers

*Hopes for U.S. bailout plan boost financials

(Adds details)

TORONTO, Sept 30 (Reuters) - The Toronto Stock Exchange's main index opened higher on Tuesday as oil recovered and market hopes for a deal on the $700-billion Wall Street bailout plan revived.

The index tumbled nearly 7 percent on Monday, the biggest drop in eight years, as U.S. lawmakers rejected the rescue plan, whose main objective is to mop up toxic investments made by U.S. financial institutions.

Shortly before 10 a.m., the S&P/TSX composite index .GSPTSE was up 184.23 points, or 1.63 percent, at 11.469.30, after climbing as high as 3 percent just after the open. All of its 10 main groups were higher.

The energy group, which dropped 10.6-percent in the previous session, led the way, up 3 percent. EnCana Corp (ECA.TO: Quote) jumped 2.6 percent to C$66.66, while Canadian Natural Resources (CNQ.TO: Quote) 6.5 percent to C$69.50.

Materials were up 0.3 percent with Potash Corp of Saskatchewan Inc (POT.TO: Quote) up 3.4 percent at C$139.90, while Teck Cominco Ltd (TCKb.TO: Quote) rose 4.6 percent to C$30.21.

The gold miners subgroup, however, slipped along with the price of bullion. [ID:nLU150945] Barrick Gold Corp (ABX.TO: Quote) was down 2.8 percent at C$39.32.

The financial services sector rose 1.6 percent. Manulife Financial (MFC.TO: Quote) was up 1.5 percent at C$36.79. The insurer said it has about $600 million in exposure to U.S. regional bank Wachovia [ID:nN29309901] ($1=$1.05 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)