August 9, 2011 / 2:53 PM / 8 years ago

CANADA STOCKS-TSX surges higher, halts 3-session slide

   * TSX soars 280.72 points, or 2.42 pct, to 11,951.68
 * All 10 main sectors rise, all up more than 1 pct each
 * U.S. Federal Reserve meeting in focus  (Adds details)
 By Ka Yan Ng
 TORONTO, Aug 9 (Reuters) - Toronto’s main stock index jumped more than 2 percent in a partial rebound on Tuesday as bank and oil issues led the rally, helped by improved sentiment ahead of this afternoon’s U.S. Federal Reserve statement.
 Following the previous session’s dive to the index’s lowest level in nearly a year, all 10 sectors advanced, and each sector notched gains of 1 percent or more.
 That put the TSX on its way to clawing back some of its losses on Monday, when the index saw its biggest intraday slide since March 2009.
 There was widespread hope on Tuesday — seen in rebounding commodity prices and a similar U.S. equity rally — ahead of the Fed’s statement, due at 2:15 p.m. Investors hope the U.S. central bank could take some type of action to stem a financial market meltdown linked to fears of a new U.S. recession.
 The trouble is, the Fed’s policy toolkit looks rather depleted, making some question the likely effectiveness of any further monetary stimulus. [ID:nN1E77724B]
 “It can get really technical but, in a nutshell, (the Fed) should be liquidity-friendly,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
 At 10:25 a.m. (1425 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 280.72 points, or 2.42 percent, at 11,951.68. The index had closed more than 4 percent lower on Monday as a U.S. credit downgrade hammered investor confidence around the globe.
 Before Tuesday’s rally, the index had fallen nearly 9 percent in three straight sessions and more than 18.5 percent since March 7, when it touched its 2011 high.
 Economically sensitive financials were among the strongest advancers on Tuesday morning, up 2.47 percent, with three banks the most influential issues overall. Toronto-Dominion Bank (TD.TO) jumped 3.2 percent to C$73.98, while Royal Bank of Canada (RY.TO) rallied 2.6 percent to C$49.77. Bank of Nova Scotia (BNS.TO) gained 3.5 percent to C$51.70.
 The oil and gas sector rose 2.93 percent, led by Suncor (SU.TO), up 2.36 percent at C$30.81. Cenovus Energy (CVE.TO) added 3.4 percent to C$32.98.
 Even gold and gold-mining stocks, which had been the go-to investment during the latest equity market rout, continued to stretch mildly higher. Bullion touched another record early in the session in its biggest three-day rally since the depths of the financial crisis in 2008.
 Though spot prices XAU= retreated a bit as North American stock markets opened higher, they remained up 1.4 percent on the day at $1,739.60 an ounce, having earlier peaked at $1,778.29. [GOL/]
 Barrick Gold (ABX.TO) rose 0.7 percent to C$46.22, while Goldcorp (G.TO) edged up 0.7 percent to C$46.62.
 “Gold shows no let-up,” said Nakamoto. “Those that own it are very happy, those that don’t are afraid to get in now.”  (Reporting by Ka Yan Ng; editing by Rob Wilson)                                        

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