April 1, 2009 / 9:08 PM / 10 years ago

CANADA STOCKS-Banks, golds lead broad TSX rally

* TSX jumps 221 points to 8,941.82

* Banks up 2.7 pct, materials ahead 3.6 pct

* All 10 main sectors end higher (Adds details, comments, official numbers)

By Frank Pingue

TORONTO, April 1 (Reuters) - Toronto’s main stock index rose for the second straight session on Wednesday, helped in large part by a bank rally as U.S. data spurred optimism for a boost in financial activity.

Healthier numbers for U.S. factory activity and pending sales of existing homes gave hope to investors that the U.S. recession was easing, and that optimism spilled into Canada. [ID:nN01407201

Shares of Toronto-Dominion Bank (TD.TO), one of the key drivers behind the index’s gain, rose 4 percent to close at C$44.55, while Bank of Nova Scotia (BNS.TO) shares jumped 3.4 percent to C$32.13.

“There’s just been a series of economic data being released that is slightly better than expectations,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. “And the fact that you are getting a broad-based rally says to me that people have confidence in the financial system,”

The S&P/TSX composite index .GSPTSE rose 221.43 points, or 2.54 percent, to end at 8,941.82, its highest closing level in nearly a week.

All of the TSX’s 10 main sectors ended higher, with the financials, information technology and energy groups all turning in gains of 2.7 percent.

But it was the materials group that posted the session’s biggest gain, rising 3.56 percent as the sector’s gold-miners lured investors along with higher bullion prices.

Barrick Gold Corp (ABX.TO) rose 4.9 percent to close C$42.80 while Goldcorp (G.TO) ended the session up 3.7 percent at C$44.00.

The composite index was mostly stable in the aftermath of comments from Bank of Canada Governor Mark Carney, who said in a speech in the Northwest Territories that Canada’s recession could extend through the second half of this year. [ID:nN01263139]

Wednesday’s rally follows a hefty gain on Tuesday that many experts attributed partly to month-end, when investors take the chance to rebalance their portfolios. And since that sometimes exaggerates what would otherwise be a smaller move, some had braced for a pullback.

“But to see a carry-through shows me that there is real money being committed to the market,” said Nakamoto. “There is no doubt that a lot of money is sitting on the sidelines and it just needs some catalyst to come into the market, and maybe we are seeing early signs of it.”

With no key Canadian data due out for the rest of the week, the resource-heavy TSX will likely take direction from commodity prices and the bigger U.S. stock markets.

Investors will also stay focused on the G20 summit in London this week as leaders of the world’s top economies meet to tackle the global economic crisis.

$1=$1.26 Canadian Editing by Rob Wilson

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