Resources lead TSX up almost 4 percent to 2009 high

Mon May 4, 2009 5:26pm EDT
 
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By Cameron French

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.   Continued...

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