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TORONTO (Reuters) - Toronto's main stock index surged nearly 4 percent to its highest point in almost half a year, as optimism over the health of the global financial sector and the economy in general pushed up issues across all industry groups.
Prices for oil and base metals surged as recent strong economic data built hopes that global consumption could increase, driving up the heavily weighted TSX energy sector by 4.65 percent, and materials issues by 5.70 percent.
"It's been a series of confidence builders that have led it in the latter parts of last week and continuing today," said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier.
Nakamoto pointed to strong purchasing data out of China and U.S. manufacturing figures released on Friday.
Adding to the optimism on Monday was data showing a rise in U.S. pending home sales and construction spending, as well as comments from a top U.S. Federal Reserve official that the recession was fading.
The S&P/TSX composite index ended the session up 373.41 points, or 3.93 percent, at 9,870.37, its highest level since November 10. All ten TSX subgroups ended higher.
The index rose 1.85 percent on Friday, and is up 30 percent since early March.
The strength has raised hopes that a full-blown recovery is in process, but some analysts caution that there is likely a lot of bad economic news still to come, which could erode the enthusiasm.
"This market seems, on a technical basis, to want to go up here, and yet I think that much of the opinion is that it's just a rally in a bear market and that at some stage here we're going to have a 10 percent to 12 percent selloff," said John Kinsey, a portfolio manager at Caldwell Securities.
Energy stocks were led by Canadian Natural Resources, up 8.3 percent to C$60.89, and Husky Energy,, which climbed 5.7 percent to C$30.98.
Leading the way among materials producers was Inmet Mining,, which gained 14.7 percent to C$50.30, and Teck Resources, which rose 12.2 percent to C$15.70.
Teck was helped by news that it plans a senior note offering to help pay down a bridge loan due this fall.
Financials stocks climbed 4.32 percent, following the lead of U.S. banks, which were boosted by hopes they will be able to raise the capital they may need following the release of government stress tests this week.
RBC Capital Markets also upgraded several Canadian banks.
National Bank of Canada climbed 6.6 percent to C$46.21, while insurer Sun Life Financial rose 5.3 percent to C$29.63.
The blue-chip S&P/TSX 60 index rose 23.46 points, or 4.07 percent, to 599.18.
Reporting by Cameron French; editing by Rob Wilson