July 3, 2012 / 9:10 PM / 7 years ago

CANADA STOCKS-TSX has best 1-day jump of 2012, near two-mth high

* TSX ends up 252.19 pts, or 2.2 pct, at 11,848.75
    * Biggest single-day gain since Nov 30
    * Hits highest level since May 4
    * Energy, mining shares lead gains
    * Investors anticipate ECB rate cut, more Fed easing

    By Jon Cook
    TORONTO, July 3 (Reuters) - Canadian stocks enjoyed their
biggest single-day gain of 2012 on Tuesday and reached a near
two-month high, as mining and energy shares soared on hopes
major central banks will ease policy to revive a world economy
hit hard by Europe's debt crisis.
    A raft of weak economic data has raised expectations that
the European Central Bank will cut interest rates to a record
low on Thursday, a move that could drive stock markets higher
and further lift commodities like oil and copper.
    "It was a brutal month last month for a lot of people, so
you usually get some money coming back to work at the beginning
of the month," said Sid Mokhtari, market technician and
director, institutional equity research, CIBC World Markets.
    All of the Toronto market's 10 main sectors finished in
positive territory.
    Leading the way was the heavily-weighted materials group,
home to mining stocks, which climbed 4.1 percent as copper hit a
seven-week high and gold rallied.  
    Influential gainers included Goldcorp Inc, which rose
4.1 percent to C$39.90, Barrick Gold, up 3 percent at
C$39.50, Potash Corp, up 2.9 percent to C$45.77 and
Teck Resources, which climbed 3.9 percent to C$32.77.
    The energy sub-index jumped 3.3 percent, tracking a U.S.
crude price which rose more than 4 percent as mounting tension
over Iran's nuclear program sparked concerns about supply
    Suncor Energy shares rose 4.3 percent at C$30.71,
playing the biggest role of any company in leading the market
higher. Canadian Natural Resources was up 4 percent at
C$28.41 and Cenovus Energy Inc jumped 5 percent to
    "You're getting a very nice bounce in crude over the past
two days," said Mokhtari, who noted U.S. oil has gained
about $10 a barrel since hitting an eight-month low last week.
    The Toronto Stock Exchange's S&P/TSX composite index
 finished up 252.19 points, or 2.2 percent, at
    The index at one point touched 11,885.33, its highest level
since May 4.
    In economic news, new orders for U.S. factory goods rose
more than expected in May and Canadian manufacturing activity
climbed in June to its highest level since
    The data followed bleak U.S. numbers on Monday that showed
U.S. manufacturing shrank in June for the first time in three
years, according to the Institute for Supply Management.
    "That ISM number yesterday was quite a disappointment," said
Philip Petursson, director of the portfolio advisory group at
Manulife Asset Management. "Investors are expecting more
stimulus out of the global central banks, including the Fed and
Chinese officials, which would be positive for commodities."
    Expectations also rose for an imminent cut in the amount of
money banks in China are required to hold as reserves after a
state-backed paper urged the move in a front-page editorial.
    The Toronto market, which was closed on Monday for a
national holiday, extended its gains from last week, as markets
rallied on Friday after euro zone leaders agreed on measures to
cut soaring borrowing costs in Italy and Spain and recapitalize
    On Tuesday, the financial subindex rose 1.3 percent, led by
Canada's top banks. Royal Bank of Canada climbed nearly
1.8 percent to C$53.09, Bank of Montreal gained 2
percent to C$57.37, and Toronto-Dominion Bank was up 1
percent at C$79.74.
    However, analysts remained cautious, adding Europe still has
not achieved anything concrete to assuage investor fears.
    "We've had four days of strong reversals with good follow
through, but to say that this has been completely reversed to
the upside is extremely premature," said Mokhtari.
    On the negative side, Research In Motion continued
its slide, falling 1.3 percent to C$7.44. Chief Executive
Thorsten Heins said on Tuesday there is nothing wrong with the
company as it exists now, denying the maker of BlackBerry
smartphones is in a "death spiral."
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