Toronto stocks soar on energy and miners

Wed Jul 30, 2008 5:29pm EDT
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By Leah Schnurr

TORONTO (Reuters) - The Toronto Stock Exchange's main index jumped more than 2 percent on Wednesday, spurred by resource issues, especially the energy sector, which rallied along with oil prices.

The heavyweight oil and gas group led the way higher, buoyed by a more than $4 rise in crude after U.S. government data showed an unexpected drop in gasoline stocks. Suncor Energy rose 8.3 percent.

Mining shares rode higher on enthusiasm over Teck Cominco's $14.1 billion takeover bid for Fording Canadian Coal Trust on Tuesday.

Teck surged 13.6 percent as investors applauded the deal, while the subindex of miners gained 4.7 percent on optimism there would be more M&A activity in the sector.

"What it shows is Teck was piling up some cash and they can easily take out big companies. And when that occurs, then you'd expect maybe there's something else in the patch on an intermediate basis that may get taken out," said Andrew Martyn, portfolio manager at Davis-Rea.

The S&P/TSX composite index closed up 340.66 points, or 2.55 percent, at 13,683.21 with all but one of its 10 main sectors pushing higher.

A move by the U.S. Federal Reserve to boost liquidity in financial markets raised optimism that it will be able to stabilize financial companies coping with credit losses. The Fed said it was prolonging the emergency credit facility for primary dealers to January 30. The facility had been due to expire in mid-September.

"Obviously, we do need the financials to be stabilized," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc. in Vancouver.   Continued...

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