* TSX ends up 2.33 percent at 10,675.68
* Bank of Canada says recession ends this quarter
* Canpotex deal spurs Potash Corp shares 7 pct higher
* Financials up 2.83 percent on economic outlook (Adds details, quote)
By Ka Yan Ng
TORONTO, July 23 (Reuters) - A declaration by the Bank of Canada that the country’s recession is almost over helped propel Toronto’s main stock index to its highest level in nearly six weeks on Thursday.
The central bank said Canada will pull out of recession during this quarter and also that the world economy has likely averted a worst-case scenario and is bottoming out. [ID:nN23196742]
Firm oil and metals prices also encouraged big gains in the index’s resource sectors, with the energy group advancing 2.94 percent and the materials group rising 2.25 percent.
Top gainer Potash Corp (POT.TO) shot 7.27 percent higher to C$104.59 as the fertilizer producer announced that Canpotex, the marketing unit for Potash, Mosaic Co (MOS.N) and Agrium Inc (AGU.TO), will sell potash to India at $460 a tonne.
That lifted a market mood that had been sour on the outlook for global fertilizer prices, spurring investors to look past Potash’s almost 80 percent drop in second-quarter profit and its cut in its full year financial forecast. [ID:nBNG368711]
The financial sector, which accounts for about a third of the TSX index, jumped 2.83 percent, boosted by the Bank of Canada’s assessment and by better than expected corporate earnings in the United States.
“The way I look at it is that all of a sudden people...will stop saying the glass is half empty. It’s half full,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
The S&P/TSX composite index .GSPTSE closed up 243.33 points, or 2.33 percent, at 10,675.68, its highest level since June 12.
Nine of its 10 main groups were higher. The exception was the consumer staples group. Five groups notched gains of 2 percent or more.
$1=$1.09 Canadian Additional reporting by Nina Lex; editing by Peter Galloway