July 30, 2008 / 3:35 AM / 9 years ago

Toronto stocks soar on energy and miners

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

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.

“We need them to be getting their act cleaned up so that one day they can recapitalize the companies to a good level, because right now they’re not lending.”

However, Mastracci added that the Fed’s efforts were not long-term solutions.

“They’re keeping that Band-Aid on just because they think it’s probably the easiest thing to do at the moment,” Mastracci said.

In Toronto, the financial sector rose 1.1 percent, with Royal Bank of Canada up C$1.04, or 2.3 percent, at C$46.62, and Canadian Imperial Bank of Commerce adding 79 Canadian cents, or 1.3 percent, to C$61.24.

The energy and materials sectors gained 5.4 percent and 3 percent, respectively. In the oil patch, Canadian Natural Resources was up C$5.28, or 6.8 percent, at C$82.58, and Suncor rose C$4.46 to C$58.42.

Among the miners, Teck jumped C$5.81 to C$48.66, HudBay Minerals was up 76 Canadian cents, or 8.1 percent, at

C$10.10.

In the latest round of quarterly results, TMX Group rose C$1.59, or 4.4 percent, to C$37.39 after the owner of the Toronto Stock Exchange said its profit was boosted by the acquisition of the Montreal Exchange derivatives market.

Overall volume was 406 million shares worth C$9.2 billion. Advancers outpaced decliners 922 to 569. The blue chip S&P/TSX 60 index closed up 20.63 points, or 2.6 percent, at 819.01.

In New York, stocks rose on a surprise increase in private-sector employment, as well as the decision from the Fed. The Dow Jones industrial average climbed 186.13 points, or 1.63 percent, to 11,583.69, while the Nasdaq composite index added 10.10 points, or 0.44 percent, to 2,329.72.

($1=$1.02 Canadian)

Editing by Rob Wilson

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