November 13, 2008 / 10:30 PM / 10 years ago

CANADA STOCKS-Resource issues help power TSX to big rally

* Benchmark index rises 4.8 percent

* Energy stocks up 7 pct as oil rises

* Materials shares gain 10 pct as gold price soars

* Loblaw up 6 pct after quarterly results

* (Adds quotes, details)

By Jennifer Kwan

TORONTO, Nov 13 (Reuters) - The Toronto Stock Exchange’s main index soared toward the end of Thursday’s session, closing nearly 5 percent higher as energy and materials issues rose with commodity prices and on hopes the market is close to finding a bottom.

The benchmark index see-sawed through a huge 780-point range from trough to peak as it tried to find its footing in a choppy session.

Among heavily weighted stocks that helped push the index higher were EnCana Corp (ECA.TO), up 8.7 percent at C$58.11, and Goldcorp (G.TO), which rose 16.9 percent to C$27.99.

The energy sector rose 7 percent and the materials group soared 10 percent, supported by rises in oil [ID:nSYD383548] and gold prices. [ID:nLD637883]

“Today was a key day in the sense that the TSX came within 35 points of testing its previous low,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

“Sentiment recently has been extremely bearish — overwhelmingly bearish — and when that happens the bears inevitably try to push the market to new lows if it’s possible,” he said.

“It’s a technical thing. If the support levels hold it gives some confidence to investors that maybe, just maybe, we may have a short-term bottom here.”

The S&P/TSX composite index .GSPTSE closed up 430.21 points, or 4.82 percent, at 9,352.78, with all 10 of its main groups in positive territory.

For much of the day, the index was in the red, dragged down by heavily weighted stocks such as Research In Motion RIM.TO, which fought back to close flat at C$53.59.

The benchmark index hit a low for the year of 8,537.34 on Oct. 27. It fell nearly 17 percent in October and is down more than 35 percent from its June peak.

“It’s symptomatic of bear markets that we get volatile rallies,” said John Ing, president of Maison Placements Canada of the late day rally.

“Unfortunately, they have very little staying power.”

Earlier in the day, brokerages Raymond James and UBS cut their share-price targets for RIM amid fears of the economic downturn hitting sales of its popular BlackBerry smartphones.

RIM said on Thursday the current market environment was “intense”. However, Co-CEO Jim Balsillie reiterated his belief that even as the economy sputters, users are unlikely to give up their mobile phones to save money. [ID:nN13365987]

Manulife Financial (MFC.TO) was also a drag on the index, down 1.9 percent at C$22.90, but the financial sector overall finished 3.1 percent higher.

Loblaw Cos Ltd (L.TO) climbed 6.2 percent to C$28.60 after the supermarket chain reported a higher quarterly profit, but it warned that the slowing economy could hold back performance for the remainder of the year. [ID:nN13466147]

Canadian Pacific (CP.TO) rose 4.2 percent to C$47.63. Earlier, its chief executive said the railway was not ready to provide earnings or revenue forecasts for 2009 due to the current economic uncertainty. [ID:nN13296254]

On Wall Street, U.S. stocks rallied as investors shrugged off weak economic news and snapped up beaten-down stocks.

The Dow Jones industrial average .DJI rose 552.59 points, or 6.67 percent, to 8,835.25, while the Nasdaq Composite index .IXIC ended up 97.49 points, or 6.5 percent, at 1,596.70. ($1=$1.21 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)

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