October 14, 2008 / 8:56 PM / 10 years ago

UPDATE 3-Toronto stocks cling to big gain after record surge

* TSX cheers U.S. plan to inject $250 bln into banks

* Index surges 18 pct at open, biggest one-day gain

* Oil and gas shares up 14.6 pct despite drop in oil

(Adds details, updates closing numbers)

TORONTO, Oct 14 (Reuters) - The Toronto Stock Exchange’s main index closed with a huge gain on Tuesday but the rise paled against the record-setting surge it started the day with as it played catch-up with Wall Street’s big rally on Monday, when Canadian markets were closed.

The benchmark index soared more than 1,600 points, or 18 percent, to its biggest intraday gain ever shortly after the market opened, following big gains on world stock markets on Monday as investor jitters about the stability of the financial system eased.

Canadian markets were closed on Monday for the Thanksgiving Day holiday.

On Tuesday, markets also cheered a U.S. plan to inject $250 billion into banks, following similar measures in Europe, a move designed to get banks lending to each other again. [ID:nSP390369]

But as the day progressed, the euphoria faded a bit and the S&P/TSX composite index .GSPTSE pared earlier gains and closed up 890.50 points, or 9.82 percent, at 9,955.66. All of its 10 sectors were higher.

Energy stocks rose 14.6 percent even as the price of oil retreated and held just above $80 a barrel as concerns about a global recession overcame bank rescue optimism. [ID:nSIN255335]

In the oil patch, EnCana Corp <ECA.TO soared 16.8 percent to C$50.80, while Canadian Natural Resources (CNQ.TO) jumped 15.1 percent to C$55.23.

The financials group, which accounts for a third of the index, rose 12.7 percent. Toronto-Dominion Bank (TD.TO) jumped 13.1 percent to C$58.99.

Manulife Financial (MFC.TO) rose 14.5 percent to C$30.50. Canada’s biggest insurer said on Monday that it expects credit losses related to the global financial crisis to reduce earnings by about C$250 million in the third quarter, but Manulife said on Tuesday it has no plans to cut its dividend. [ID:nN14414302] ($1=$1.16 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)

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