TSX posts broad gains on bargain-hunting

Thu Jan 31, 2008 5:38pm EST
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By Leah Schnurr

TORONTO (Reuters) - Shaking off a weak start, the Toronto Stock Exchange's main index pushed higher on Thursday, as investors scouted for bargains in shares that had been knocked down by worries over the global economy.

Gains were across the board as the market absorbed Wednesday's half-point U.S. interest rate cut, which made for 1.25 percentage points in rate cuts in the United States in less than two weeks.

After slumping more than 170 points in the morning, the TSX rallied as investors bought into the energy, financial and materials sectors.

In individual moves, Potash Corp of Saskatchewan (POT.TO: Quote) added $6.39, or 4.7 percent, to $141.83, while Nova Chemicals Corp NCX.TO gained $1.74, or 6.4 percent, to $28.74 after the plastics maker swung to a fourth-quarter profit.

"A 1.25 percentage cut in interest rates in the U.S. is pretty dramatic, so principally I think that's what's doing it," said Douglas Davis, president at Davis-Rea.

"I think what will happen is this will go on for a while and then the lows will be tested one more time at some point later in the year."

The S&P/TSX composite index .GSPTSE closed up 156.89 points, or 1.21 percent, at 13,155.10, with all 10 of its main sectors in positive territory.

The financial sector, the biggest group on the index, rose 1.4 percent, with Canadian Imperial Bank of Commerce (CM.TO: Quote) up $4.55, or 6.6 percent, at $73.25, and Toronto-Dominion Bank gaining 76 Canadian cents, or 1.1 percent, to $68.01.   Continued...