May 9, 2011 / 9:24 PM / 7 years ago

CANADA STOCKS-Resources lift TSX in broad rally, Forzani jumps

   * TSX up 110.53 points, or 0.81 percent, at 13,677.13
 * All 10 sectors in positive territory
 * Forzani shares up 49 percent, Canadian Tire up 2.73 pct  (Updates with details, comments)
 By Solarina Ho
 TORONTO, May 9 (Reuters) - Toronto’s main stock index closed higher on Monday in a broad-based rally led by resource issues, while news that Canadian Tire (CTCa.TO) planned to buy Forzani Group FGL.TO also helped lift sentiment.
 Stocks from the three heavyweight sectors -- materials, energy and financials -- led the blue-chip index.
 Materials, home to mining companies, posted a 1.54 percent gain. Energy stocks rose 0.93 percent while financials were up 0.39 percent. The three sectors combine to make up more than 75 percent of the index’s weight.
 Oil, bullion and silver prices all snapped back from last week’s dramatic sell-off, in a move many traders attributed to bargainhunting.  [O/R] [GOL/]
 Goldcorp (G.TO), up 2.15 percent at C$48.38, played the biggest role of any stock in leading the market higher.
 Manulife Financial (MFC.TO), up 1.83 percent to C$17.79, and Barrick Gold (ABX.TO), which rose 1.19 percent at C$45.96 also played a major role in lifting the index.
 “You’ve got a little bit of a rebound coming after last week’s routing here,” said Bruce Latimer, a trader with Dundee Securities.
 “We’re not quite sure how much of a rebound we’re going to see over today and the next few days. To me, looks like some of the volumes are lighter across the board. I think people are waiting to see how this correction pans out.”
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 110.53 points, or 0.81 percent, to finish at 13,677.13. The index, which saw all 10 of its sectors in positive territory, extended Friday’s rise and after falling roughly 2.7 percent on the week.
 Energy stocks were also helped by a jump in gasoline prices. Traders were also eyeing a fire at Chevron’s Pascagoula refinery and Mississippi River flooding near several U.S. refineries, though none has been impacted. [ID:nN09232133]
 Canadian Oil Sands COS.TO jumped 3.21 percent to C$31.85 and Husky Energy (HSE.TO) rose 2.5 percent to C$28.29.
 Canadian Tire and Forzani both rose on news of a C$771 million ($798.5 million) friendly deal that will give Canadian Tire a commanding share of the country’s sporting goods market.
 “It makes sense to me what Canadian Tire’s doing, but it certainly came as a surprise,” said Nakamoto. “I think they have proven themselves as pretty good operators and acquirers.”
 Canadian Tire climbed 2.73 percent to C$2.73 while Forzani Group sky-rocketed 49 percent to C$26.25, roughly in line with with the 50 percent premium over Friday’s closing share price that Canadian Tire offered for each Forzani share.
 Such deals typically boost investor sentiment because they suggest other stocks may be takeover targets that could attract rich premiums.
 “That one certainly caught a few people by surprise here ... mergers and acquisitions of that size are usually a sign of a healthy market and a healthy economy,” said Latimer.
 The overall consumer discretionary group was up 0.66 percent.  [ID:nL3E7G91PE]
 ($1=$0.96 Canadian)  (Editing by Jeffrey Hodgson)                                        

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