September 11, 2008 / 10:11 PM / 10 years ago

UPDATE 5-Toronto stocks rally as bargain-hunting sets in

*TSX rises for a second day after an early decline

*Energy and materials sectors rise on bargain-hunting

*Tech sector rises with Research In Motion

(Adds quotes and details)

By Natasha Elkington

TORONTO, Sept 11 (Reuters) - The Toronto Stock Exchange’s main index rose for a second day on Thursday, overcoming a rocky start as a bargain-hunting rally took hold in hard-hit resource shares.

Among the big gainers, fertilizer producer Potash Corp of Saskatchewan POT.TO was up 5.5 percent at C$162.00, and oil company EnCana (ECA.TO) was up 3 percent at C$70.82. Overall, the market’s energy group ended up 1.4 percent, and the materials sector rose 0.6 percent.

The price of oil fell by $1.71 to settle at $100.87 a barrel, allowing industrial stocks to rise 1.3 percent on hopes of lower fuel bills.

The financial sector pushed up 0.5 percent after falling early in the day on fears for the future of U.S investment bank Lehman Brothers LEH.N. A report later in the day by the Wall Street Journal said Bank of America is in talks to buy Lehman.

“If Lehman goes under without somebody else buying them out and running it, it’s a huge mess,” said Sal Masionis, stockbroker at Brant Securities.

Bank of Montreal (BMO.TO) was up 1 percent at C$49.06, and Royal Bank of Canada (RY.TO) rose 0.9 percent to C$49.96.

The S&P/TSX composite index .GSPTSE closed up 115.61 points, or 0.93 percent, at 12,612.76 with nine out of its 10 sectors on the upside.

The technology sector also fared well with shares of Research In Motion RIM.TO rising on news of a number of deals to add consumer-related products to its BlackBerry smartphones. RIM was up 4.9 percent at C$117.88. The tech sector rose 2.5 percent.

Shares of Lululemon Athletica Inc. LLL.TO rose 15.3 percent to C$22.18 after it reported a higher profit due to the expansion of its chain of yoga-wear-inspired stores.

Analysts said worries over slowing global growth and demand for resources remained but the market shrugged them off as it saw value after a week of sharp declines.

“To have a relief rally or bounce is very likely, and that’s what we’re seeing,” said Francis Campeau, broker at MF Global Canada in Montreal.

“On the fundamental standpoint, I think the Street is still buying the global slowdown, hence crude still going down, but our markets aren’t going down because we’ve done the move already,” he added.

Market volume was 420 million shares worth C$7.5 billion. Decliners outpaced advancers 900 to 605. The blue chip S&P/TSX 60 index .TSE60 closed 8.90 points or 1.19 percent, higher at 755.71.

On Wall Street, stocks climbed on talk that Lehman was shopping itself to suitors including Bank of America.

The Dow Jones industrial average .DJI ended up 164.79 points, or 1.46 percent, at 11,433.71, while the Nasdaq Composite Index .IXIC finished up 29.52 points, or 1.32 percent, at 2,258.22. ($1=$1.08 Canadian) (Editing by Peter Galloway)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below