TSX gains as Fed comments ease economic jitters

Fri Aug 27, 2010 5:00pm EDT
 
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By Jennifer Kwan

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.   Continued...