June 2, 2010 / 9:35 PM / 9 years ago

CANADA STOCKS-TSX soars nearly 2 pct as oils, banks rebound

* TSX up 208.70 points, or 1.8 percent, at 11,780.67

* Energy, financials, materials lead rally

* Bombardier rises almost 5 percent (Adds details, quotes)

By Claire Sibonney

TORONTO, June 2 (Reuters) - Toronto’s main stock index surged on Wednesday after a steep selloff the day before, as upbeat investors scooped up beaten-down shares including heavyweight energy and banking issues.

Powerhouse energy stocks shot up 3.2 percent, as the price of oil rose, with the sector reversing nearly all losses from Tuesday. [O/R]

The biggest gainers included Suncor Energy (SU.TO), up 4.3 percent at C$33.17, Canadian Natural Resources (CNQ.TO), which rose 4.4 percent to C$36.68, and EnCana Corp (ECA.TO), up 5.3 percent at C$33.90.

“People are trying to judge the swings in the market,” said John Kinsey, portfolio manager at Caldwell Securities.

“We seem to have one pretty bad day followed by one pretty good day ... they’re kind of bottom-fishing.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 208.70 points, or 1.8 percent, at 11,780.67, with all 10 of its main groups higher.

“One day, the whole world is falling apart, you’ve got North Korea and you’ve got Gaza and you’ve got Europe, said Kinsey.

“Then the next day ... people say, you know, these things aren’t really the end of the world. They’re all kind of small isolated instances with the exception maybe of people worrying about the contagion in Europe.”

The jump by the TSX mirrored equity gains in the United States , where investors were encouraged by U.S. data showing pending sales of previously owned homes increased to a six-month high in April. [.N]

Francis Campeau, a broker at MF Global Canada in Montreal, added that the energy rally in Toronto could be linked to BP Plc (BP.L) as it mounted another effort to curb the flow of oil spewing into the Gulf of Mexico, while the U.S. government launched criminal and civil investigations into the disaster. [ID:nN02139553] [nSPILL]

“I think it’s BP-related,” said Campeau. “Canada’s production might be perceived as a bit safer than U.S. Gulf-based production.”

Financials rose 1.5 percent, with Bank of Nova Scotia (BNS.TO) up 2.6 percent at C$50.82 after reporting a knockout quarterly profit on Tuesday. [ID:nN28202192]

Royal Bank of Canada (RY.TO), which has been lagging since reporting results that fell short of lofty expectations, also gained 1.6 percent to C$55.08.

Other standouts included Bombardier Inc (BBDb.TO), which climbed 4.8 percent to C$4.83. The world’s No. 3 civil aircraft maker beat market expectations despite reporting a lower quarterly profit. [ID:nSGE6510EC]

Mining shares, up 4.2 percent, also provided support with Teck Resources TCKb.TO, the country’s largest base-metals producer, soaring 6.5 percent to C$36.06.

The TSX briefly slid into negative territory after the open on softness in gold miners, before bouncing higher. [GOL/]

Barrick Gold (ABX.TO) fell 0.2 percent to close at C$44.82, but Goldcorp Inc (G.TO) edged 0.7 percent higher to C$45.91.

$1=$1.04 Canadian Reporting by Claire Sibonney; editing by Rob Wilson

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