September 18, 2008 / 2:27 PM / 10 years ago

UPDATE 1-Toronto stocks soar on central bank rescue effort

*TSX rallies after central banks inject liquidity

*Financial services sector up 4.4 percent

*Energy stocks spike as oil rises to $100 a barrel

(Adds details)

TORONTO, Sept 18 (Reuters) - The Toronto Stock Exchange’s main index soared on Thursday morning after central banks around the world poured in $180 billion in extra liquidity to calm markets made jittery by the mayhem on Wall Street.

The rally reversed a nearly 3 percent tumble on Wednesday, when the Toronto index dipped into bear-market territory, down 21 percent from its June 18 peak.

The central bank injection [ID:nSP129521] comes after the U.S. government earlier this week rescued insurer American International Group (AIG.N) with an $85 billion loan to stave off its bankruptcy, a move that was met with trepidation as investors worried the bailout wouldn’t be enough to stem the financial turmoil. [ID:nN13574113]

Shortly after the open, the S&P/TSX composite index .GSPTSE was up 476.71 points, or 4 percent, at 12,354.40, with all of its 10 main groups higher.

The heavily-weighted financial services sector rose 4.4 percent with Sun Life Financial (SLF.TO) up 3.7 percent to C$37.08.

The big energy sector spiked 5.2 percent as oil rose to $100 a barrel on the action by the central banks, and as the U.S. energy sector struggled to restart operations shut down for Hurricane Ike. [ID:nSP354592]. In the oil patch, Petro-Canada PCA.TO rose 3.5 percent to C$38.28.

The materials group rose 4.3 percent as the lingering glow of safe-haven buying pushed bullion up [ID:nLI386006], while some base metals rebounded. [ID:nLI461400]

Among the gainers in the materials, Agnico-Eagle Mines (AEM.TO) climbed 0.13 percent to C$63.14 and Potash Corp of Saskatchewan Inc POT.TO rose 5.3 percent to C$179.74. ($1=$1.07 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)

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