TORONTO (Reuters) - Toronto’s main stock index notched its steepest one day gain in just over 10 weeks on Friday, led by strong resource and financial issues, after Federal Reserve Chairman Ben Bernanke said the U.S. central bank was ready to take further steps to aid the recovery.
Bernanke, in an address to an annual conference of global central bankers hosted by the Fed, downplayed concerns that the country might slip back into recession.
The central bank chairman pleased investors by indicating the Fed is prepared to do what is needed to ensure economic recovery, said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.
“That comment is basically reassuring that the Fed’s going to step in and help out in whatever way they can should the economy continue weaken,” he said.
The TSX index climbed sharply, led by its three main sectors: energy, financials and materials. The resource-laden market was also supported by strong oil and base metal prices.
The Toronto Stock Exchange’s S&P/TSX composite index finished the day up 226.54 points, or 1.94 percent, at 11,879.72, with all of its 10 main sectors higher.
It was the steepest one day percentage gain for the index since June 15. The TSX rose 1.3 percent for the week.
Joe Ismail, technical analyst at Maison Placements Canada, said the market’s firm rise above its 50-day moving average suggests it may move higher and even retest April peak of around 12,300.
The blue chip S&P/TSX 60 index closed 14.92 points higher, or 2.2 percent, at 692.33.
Some of the influential names on the upside included Suncor Energy, up 1.7 percent to C$32.70, and Royal Bank of Canada, which climbed 3 percent to C$50.40. Teck Resources was higher by 4.6 percent at C$35.11.
The big issue that has been weighing on markets recently has been the idea that the U.S. economy will grow very slowly, or even see a double-dip recession, said Julie Brough, vice-president at Morgan Meighen & Associates.
“The fact that he’s basically putting out there that they will keep priming the pump as long as they need to, and as aggressively as they need to, takes away some of those fears of a double dip or a very slow period economically,” she said.
Even before Bernanke’s comments, however, the TSX had risen on revised quarterly growth figures that showed the U.S. economy was performing better than anticipated.
In individual company news, Potash Corp gained 1.1 percent to C$154.99 after falling for three days as investors continued to watch closely for developments around BHP Billiton’s $39 billion takeover offer.
BHP’s chief executive is expected to travel to North America to mount a charm offensive to woo Potash shareholders, as a potential Chinese rival reiterated it was closely watching developments.
Research In Motion, down 2.2 percent at C$48.35 also remained in the spotlight. India may extend an August 31 deadline in its standoff with the BlackBerry maker over access to encrypted data, if RIM says it has a solution and asks for time, a government source said on Friday.
Manulife Financial, one of the most heavily traded stocks on the market, gained 3.3 percent to C$12.06. The Canadian insurer and Switzerland’s Ace Ltd are among bidders for New York Life Insurance Co’s Hong Kong, Taiwan and South Korean assets, sources said, in a deal valued between $800 million and $1 billion.
Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson