October 18, 2011 / 9:09 PM / 7 years ago

CANADA STOCKS-TSX swings higher on European hopes

   * TSX ends up 130.07 points, or 1.09 pct, at 12,053.11
 * Nine of 10 sectors stronger, health care down  (Updates to close)
 By Claire Sibonney
 TORONTO, Oct 18 (Reuters) - Toronto’s main stock index rebounded to end sharply higher on Tuesday as a reported deal to strengthen the euro zone’s bailout fund boosted investor hopes that a global financial crisis would be averted.
 U.S. stocks and commodity prices also recovered from earlier losses, with U.S. crude futures shooting more than 2 percent higher. [.N] [O/R]
 Leading the advancers on the TSX, Suncor Energy (SU.TO) jumped 2.8 percent to C$30.66, Canadian Natural Resources (CNQ.TO) rose 3.1 percent to C$32.96 and Canadian National Railway (CNR.TO) added 3 percent to C$74.65.
 Britain’s Guardian newspaper, citing EU diplomats, reported that France and Germany had agreed to increase the euro zone’s rescue fund to 2 trillion euros ($2.76 trillion) as part of a plan to resolve the bloc’s debt crisis. The deal is expected to win support at Sunday’s European summit. [ID:nN1E79H1KC]
 “I don’t know how true that is, but for today the market is taking it as a half-truth,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, noting the reported increase in the size of the fund would be more of a “bazooka approach” than what the market had expected.
  The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 130.07 points, or 1.09 percent, at 12,053.11, after a volatile day that saw the market swing from losses to gains. Nine of the 10 main sectors ended on firmer footing, while health care slipped 0.4 percent.
 Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto, cautioned that investors were skeptically digesting news reports on euro zone developments.
 “Those numbers are what people were hoping for and highlighted as what would reduce the financial crisis in Europe ... but it still has to go through the whole Euroepan scheme.”
 By midday the TSX had already bounced back from its fall to a 1-week low, which had been prompted by data that showed slowing growth in China and a warning from Moody’s that it may place a negative outlook on France’s credit rating.
 Markets had a somewhat positive reading on a mixed bag of U.S. bank earnings, helping to underpin Canadian financials.
 Bank of America (BAC.N) reported a third-quarter profit that was lifted by accounting gains and asset sales, while Goldman Sachs Group (GS.N) posted a rare loss. [ID:nN1E79G1K9] [ID:nN1E79G1UJ]
 The TSX’s financial group ended up 0.4, as insurers rebounded from a steep selloff in the previous session.
 Manulife Financial (MFC.TO) gained 3.5 percent to C$12.77 and Sun Life Financial (SLF.TO) picked up 1.7 percent to C$24.48.
 Among the decliners, gold-mining shares slid along with the price of bullion, with heavyweight producer Barrick Gold (ABX.TO) down 1 percent at C$47.80. [GOL/]
 ($1=$1.01 Canadian)  (Reporting by Claire Sibonney; editing by Rob Wilson)                 

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