October 6, 2011 / 2:53 PM / 6 years ago

CANADA STOCKS-TSX rises more than 1 pct as Ivanhoe surges

 * TSX up 160.19 points, or 1.4 pct, at 11,617.41
 * Nine of 10 sectors higher
 * Ivanhoe-Rio Tinto certainty sends shares higher
 (Adds detail, analyst comment)
 By Andrea Hopkins and Ashleigh Patterson
 TORONTO, Oct 6 (Reuters) - Toronto's main stock index rose
more than one percent on Thursday as certainty over the
Ivanhoe-Rio Tinto massive copper-gold project in Mongolia drove
the resource-heavy index higher for the second straight day.
 The heavyweight materials sector, which includes gold and
base metal miners, surged 2.9 percent in early trade as shares
in Canadian miner Ivanhoe Mines IVN.TO soared more than 17
percent in the wake of news that its Oyu Tolgoi project will go
ahead unchanged. [IVN.TO]
 Toronto stocks also benefited as the European Central Bank
took steps to pump more cash into the euro zone banking system
in a bid to contain the region's debt crisis, though
uncertainty remained. [MKTS/GLOB]
 "A number of people are not sure whether yesterday was a
fake-out or the real McCoy," said Irwin Michael, portfolio
manager at ABC Funds.
 Toronto stocks gained 2.5 percent on Wednesday after three
days of losses as commodities rallied and U.S. economic data
came in better than expected.
 Michael said there was little certainty among investors as
to which way market sentiment would head in the near term.
 "Any news that comes up, if it is good, it brings the
market up a bit more, it emboldens people a bit, and if there
is negativity, people say we kind of expected it, and let's
wait and see. So it's a tug of war right now."
 At 10:26 a.m. (1426 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was up 160.19 points, or 1.4
percent, at 11,617.41.
 Nine of 10 sectors were higher, led by a 2.9 percent surge
in the materials sectors and a 2 percent rise in the energy
 Potash Corp POT.TO led the gainers, up 4.1 percent to
C$48.45, followed by Suncor Energy SU.TO, up 2.4 percent at
 But the big story was Ivanhoe, whose shares surged more
than 17 percent after the Mongolian government, Ivanhoe and Rio
Tinto agreed to back a 2009 investment agreement for the Oyu
Tolgoi copper-gold deposit, ending discussions over possible
 The 2009 deal gave a 66 percent stake in the
multibillion-dollar Oyu Tolgoi project in Mongolia's South Gobi
region to Ivanhoe, in which Rio Tinto RIO.AX now owns a 48.5
percent stake.
 The government holds the remaining 34 percent stake in the
project and has the right to increase its stake to 50 percent
after 30 years. [ID:nL3E7L622F]
($1=$1.05 Canadian)
 (Editing by Jeffrey Hodgson)

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