September 1, 2010 / 9:04 PM / 8 years ago

CANADA STOCKS-TSX closes above 12,000 on recovery optimism

* TSX up 89.92 points, or 0.75 percent, at 12,003.78

* Index closes at highest level since May 14

* Eight of index’s 10 main sectors higher (Adds quote, company details)

By Jennifer Kwan

TORONTO, Sept 1 (Reuters) - Toronto’s main stock index notched its highest close in more than 15 weeks on Wednesday as U.S. and overseas economic data stoked optimism about global recovery.

Toronto took its cue from world stock markets, which rallied on stronger economic numbers from China and Australia and on a closely watched report that showed the U.S. manufacturing sector expanded more quickly than expected in August. [ID:nN01115648]

In China, the manufacturing sector rebounded in August after slowing for several months, while Australia’s economy grew at the fastest pace in three years last quarter.

Those rosy readings sent oil prices sharply higher, while copper hit multi-month highs, pushing up the TSX index’s resource-linked sectors. [O/R] [MET/L]

Suncor Energy (SU.TO) rallied 4.7 percent to C$33.73, while First Quantum Minerals (FM.TO) shot up 5.7 percent to C$64.96. Teck Resources TCKb.TO jumped 5.5 percent to C$37.64.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished the day up 89.92 points, or 0.75 percent, at 12,003.78, with eight of its 10 main sectors higher. It was the index’s sixth day in positive territory and its highest close since May 14.

The blue chip S&P/TSX 60 index .TSE60 closed 5.24 points, or 0.75 percent, higher at 699.29.

While Toronto got caught up in the optimism reflected in global equities, other factors were also at play, said Levente Mady, market strategist at Union Securities in Vancouver.

“There’s some positive seasonality this week heading into Labor Day and there must be some short-covering that is driving this bounce,” he said.

Despite the rally, the “overwhelming majority” of data points to a sluggish economic landscape, particularly when it comes to the labor market, Mady said.

Another report on Wednesday, for example, showed the U.S. private sector unexpectedly cut 10,000 jobs in August, compared with a gain of 37,000 in July.

“Some of the data overnight was good. The ISM (manufacturing) number was good, but I don’t believe this rally and I think the overwhelming majority of the data continues to be soft and points to weakness on the economic front. I don’t know if this is sustainable,” he said.

Economically sensitive financial shares rose 1.3 percent on Wednesday with Royal Bank of Canada (RY.TO) up 2 percent, and Canadian Imperial Bank of Commerce (CM.TO) up 1.6 percent.

Quarterly profit at Bombardier Inc (BBDb.TO) fell 27 percent on weakness in both its aerospace and train-making segments, but a significant reduction in business-jet cancellations pointed to a recovery in that sector. Bombardier shares jumped 3.6 percent to C$4.60.

Alimentation Couche-Tard Inc (ATDb.TO), up 4 percent at C$23.80, raised its offer for Casey’s General Stores (CASY.O) to $38.50 a share on Wednesday, trumping the $38 a share offered by Casey’s under a recapitalization plan aimed at thwarting a Couche-Tard takeover. [ID:nSGE6800J1]

$1=$1.05 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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