* TSX up 175.06 points, or 1.42 percent, at 12,498.00
* All 10 of TSX’s main sectors end higher
* Gold, energy producers climb with bullion, oil prices (Adds details, quotes)
By Solarina Ho
TORONTO, Oct 5 (Reuters) - Toronto’s main stock index had its highest finish in more than two years on Tuesday as commodity prices surged on expectations the U.S. Federal Reserve would follow in the footsteps of the Bank of Japan and take steps to stimulate the economy.
“The real highlight is materials stocks, especially gold stocks,” said Jean-Francois Dion, vice-president and portfolio adviser of Canadian equities at RBC Dominion Securities.
“A lot of anticipation around the quantitative easing program coming from the Fed at its next meeting — that’s putting pressure on the U.S. dollar, really helping gold and metals.”
The S&P/TSX composite index .GSPTSE finished up 175.06 points, or 1.42 percent, at 12,498.00, it highest finish since Sept. 26, 2008.
The materials sector rose 2.3 percent, driven by a strong showing from base-metal miners, including Teck Resources Ltd TCKb.TO, which jumped 4.1 percent to C$44.06, and Inmet Mining Corp IMN.TO, which was up 3.3 percent at C$58.72. [MET/L]
Gold miners, buoyed by record bullion prices, were also higher. Barrick Gold Corp (ABX.TO) rose 2.3 percent to C$48.18, and Kinross Gold Corp (K.TO) climbed 2.7 percent to C$19.79.
The price of gold surged to record levels above $1,340 an ounce and copper hit two-year highs at $8,229 a tonne after the Bank of Japan said it would pump more funds into the country’s struggling economy and keep interest rates virtually at zero. [ID:nTOE69305D] That move stoked expectations the Fed might do the same, weakening the greenback and lifting U.S. dollar-denominated commodities.
The energy sector climbed 1.4 percent as U.S. crude oil futures rose 2 percent to $82.82 a barrel. Suncor Energy (SU.TO) was up 3.7 percent at C$34.86. Canadian Natural Resources Ltd (CNQ.TO) gained 3.4 percent to C$37.34.
The broad-based rally pushed all 10 of the TSX’s main sectors higher. The financial group climbed 1.5 percent, with all the major banks advancing. Toronto-Dominion Bank (TD.TO) rose 2.2 percent to C$75.31 while Royal Bank of Canada (RY.TO) climbed 1.9 percent to C$54.67.
“I think we’ve come a long way in a very short period of time. The market is getting to an overbought position in my mind,” said Rick Hutcheon, president and chief operating officer at RKH Investments. “I’m a bit wary as to how long this can persist at this rate of climb.”
In individual company news, Potash Corp POT.TO ended down 1.4 percent at C$145.64. The fertilizer producer, which is fending off a $39 billion hostile takeover bid from BHP Billiton, slammed a report commissioned by Saskatchewan that favors BHP’s bid over a possible bid from a Chinese entity. [ID:nN05181079]
Bombardier Inc (BBDb.TO), which won a C$1 billion contract to build nearly 500 new subway cars in Montreal, climbed 3 percent to C$5.17. [ID:nN05207151]
($1=$1.02 Canadian) (Editing by Rob Wilson)