(Updates with official closing numbers, adds details, quotes)
TORONTO, Jan 10 (Reuters) - The Toronto Stock Exchange’s main index came back from big early losses to finish higher on Thursday, as firm banking and resource issues helped yank the index higher.
Heightened investor expectations of further interest rate cuts helped prompt the broad-based rally following comments made by U.S. Federal Reserve Chairman Ben Bernanke.
Financials led the way up, gaining 1.5 percent. Canadian Imperial Bank of Commerce (CM.TO) was among the biggest net gainers, rising C$2.34, or 3.4 percent, to C$71.34.
“People get a general sense that the Federal Reserve when they meet are going to cut (interest rates) by 50 basis points,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. “There was some talk that it was only going to be 25, but I think most people now believe it’s going to be 50 basis points.”
“Definitely the tone was that (Bernanke) was going act fairly aggressively to stem the downturn in the economy,” Nakamoto added.
Bernanke said in remarks to a housing and finance group that the U.S. economic outlook was worsening and that the Fed was ready to act aggressively.
After swinging 100 points both up and down, the S&P/TSX composite index .GSPTSE closed up 62.69 points, or 0.46 percent, at 13,642.63. Eight of the TSX’s 10 main groups were in positive territory.
The materials sector, home to resource shares, rose 0.6 percent, while the gold-mining subsector gained 1.6 percent as the price of bullion surged to a record high after Bernanke’s comments.
Silver Standard Resources Inc SSO.TO SSRI.O climbed C$1.44, or 3.9 percent, to C$38.21 after the miner said it had found a new gold-and-copper zone at its Snowfield project in northern British Columbia.
On the downside, the energy sector was the biggest drag, shedding 1.3 percent, amid lower oil prices and concerns that energy demand could be staunched by an economic slowdown.
Suncor Energy (SU.TO) was the biggest net decliner by weight, falling C$3.05, or 2.8 percent, to C$106.11. Canadian Natural Resources (CNQ.TO) was off C$1.95, or 2.6 percent, to C$71.79. ($1=$1.01 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)