August 13, 2009 / 8:43 PM / 10 years ago

CANADA STOCKS-TSX surges as economic hope drives commodities

* TSX rises 1.55 percent to 10,825.56

* Mining, energy, industrials lead broad rally

* Surprise European growth helps sentiment

TORONTO, Aug 13 (Reuters) - Toronto’s main stock index rose sharply on Thursday as surprisingly strong European economic data buoyed sentiment and commodity prices, sparking a resource-led rally.

Reports showing recessions in Germany and France ended in the second quarter overshadowed disappointing U.S. retail sales and weekly jobless claims data, and allowed investors to become increasingly more comfortable with risk in their portfolios.

Copper rallied to a 10-month peak on the strong sentiment and gold rose on concerns about inflation, boosting the TSX index’s materials sector by 2.84 percent. Energy issues gained 1.88 percent as oil also ended higher.

“It does seem as though it’s the premise that the North American and global economies are strengthening,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

“It’s a good rally on the back of that sentiment.”

Among materials issues, Pan American Silver PAA.TO jumped 10.4 percent to C$22.53, and copper and gold producer Quadra Mining QUA.TO rose 7 percent to C$12.51.

Among oil and gas producers, Talisman Energy TLM.TO gained 3.7 percent to C$17.55, while Nexen NXY.TO jumped 3.6 percent to C$23.41.

Altogether, the Toronto Stock Exchange’s S&P/TSX index climbed 165.69 points, or 1.55 percent, to end at 10,825.56.

$1=$1.09 Canadian Reporting by Cameron French; editing by Peter Galloway

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