March 26, 2008 / 12:37 AM / 10 years ago

Toronto stocks jump 300 points on commodity rally

TORONTO (Reuters) - The Toronto Stock Exchange’s main index pushed higher for a third successive session on Tuesday with a rebound in commodity prices powering it to a 300-point gain.

<p>A Toronto Stock Exchange logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch</p>

A rally in the price of gold helped make miners among the biggest winners on the index, with Agnico-Eagle Mines (AEM.TO) up C$3.95, or 5.9 percent, at C$71.39, and Goldcorp (G.TO) up C$2.68, or 7.1 percent, at C$40.70. The subindex of gold producers jumped 4.8 percent.

Also in the resource sector, Potash Corp of Saskatchewan (POT.TO) rose C$5.33, or 3.5 percent, to C$159.34, while the materials group as a whole rose 4.4 percent.

The large energy group also buoyed the benchmark as oil prices edged up after a choppy session. The sector was up 2.8 percent, with Suncor Energy (SU.TO) gaining C$3.87, or 4.1 percent, to C$98.89, and EnCana Corp (ECA.TO) rising C$1.91, or 2.6 percent, to C$75.25.

The benchmark index, which is heavily weighted to the resource side, was stung last week by a steep selloff in commodities as fallout from the credit squeeze continued to spread.

Gavin Graham, chief investment officer at Guardian Group of Funds, said that the recent selloff was to be expected “given how rapidly all the hard assets had gone up in the last half of February (and) first half of March.”

“I think if you look at some of the commentators who have been longer-term U.S. dollar bears and commodity bulls, they were stating that even with the selloff ... you should expect these types of rapid pullbacks in a longer-term bull market and that the long-term fundamentals still remain pretty attractive.”

The S&P/TSX composite index .GSPTSE closed up 302.50 points, or 2.32 percent, at 13,322.22 with all but one of its 10 main sectors in positive territory. When added to Monday’s more than 240-point rally the day’s gains helped make for a rise of almost 5 percent over three sessions.

The tech sector lent support to the index, rising 2.4 percent, while Research In Motion RIM.TO added C$4.21, or 3.7 percent, to C$118.31.

Nortel Networks NT.TO was up 33 Canadian cents, or 5 percent, at C$7.00 after it said it had won a five-year contract with U.S. Cellular to boost the wireless carrier’s network using Nortel’s CDMA technology.

Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri, said there is a more positive sentiment toward the tech sector in general with many of the stocks doing better than had been expected.

“It’s interesting that the tech companies have not been much effected by the troubles we’ve seen in the credit markets and the other areas that have affected many other sectors,” Warne said.

On the economic front, strong Canadian retail numbers added confidence to the benchmark after data showed Canadian retail sales were up 1.5 percent in January, making for a third month in a row of big gains.

The consumer staples sector rose 2.7 percent.

The health care sector was the lone group on the downside, off 2 percent. Biovail Corp BVF.TO was down 62 Canadian cents, or 5.3 percent, at C$11.04 the day after the U.S. Securities and Exchange Commission said the pharmaceutical company will pay $10 million to settle a probe into fraudulent accounting. Four current and former officers still face charges from the regulator.

Market volume was 468 million shares worth C$8.5 billion. Advancers outpaced decliners 1,077 to 544. The blue chip S&P/TSX 60 index .TSE60 closed up 17.18 points, or 2.24 percent, at 782.74.

In New York, the Nasdaq composite index .IXIC was also boosted by a bounce in commodities, up 14.30 points, or 0.61 percent, at 2,341.05. But the Dow Jones industrial average .DJI edged down 16.04 points, or 0.13 percent, to 12,532.60, hampered by losses in Bank of America Corp BAC.N..

($1=$1.02 Canadian)

Editing by Peter Galloway

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