October 28, 2008 / 8:58 PM / 10 years ago

CANADA STOCKS-Bounce-back in resources helps spur big rally

*TSX index rebounds after steep 8 percent drop on Monday

*Energy, materials stocks soar despite stalled oil prices

*Rogers climbs 10 percent after strong quarterly results

(Adds updated closing numbers, quote, details)

TORONTO, Oct 28 (Reuters) - The Toronto Stock Exchange’s main index surged on Tuesday as investors flocked to commodity and financial stocks that were beaten down in Monday’s steep fall, encouraged by strong earnings from several companies, including Rogers Communications Inc (RCIb.TO).

Among heavily weighted stocks that led the market higher were insurer Manulife Financial Corp (MFC.TO), which rose 11 percent, oil company EnCana Corp (ECA.TO), which was up 8.7 percent, and Barrick Gold (ABX.TO), which rallied 12.5 percent on a firmer bullion price.

Shares of Rogers, the country’s biggest wireless service provider, rose 10 percent to C$32.00 after it said quarterly profit jumped 84 percent, helped by sales of Apple’s iPhone. [ID:N27347751]

TransCanada Corp (TRP.TO) (TRP.TO) rose 5.6 percent to C$34.44 after it posted a 20 percent profit rise. [ID:nN28386050]

The market got a boost from strong earnings, said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

“This frenetic trading is very largely sentiment driven,” he said. “It’s a couple of good earnings from bellwether companies. A very large part of the sentiment is the feel good factor coming from the U.S. today.”

U.S. stocks also charged back on Tuesday with the Dow Jones industrial average up more than 10 percent, and Nasdaq up more than 9 percent.

The S&P/TSX composite index .GSPTSE closed up 614.29 points, or 7.20 percent, at 9,151.63, with all of its 10 main groups higher. On Monday, the index logged its second biggest percentage drop ever, behind an 11.3 percent drop in October 1987.

Materials rose 9.8 percent as metals prices were firm with Barrick Gold up 12.5 percent at C$25.32.

The oil and gas sector gained 7.7 percent, even though the price of oil turned negative to settle down at $62.73 a barrel [ID:nSP356619].

The financials group rose 7 percent on hopes the U.S. Federal Reserve will cut rates further on Wednesday to stimulate economic activity.

The sector rose even after brokerage Dundee Securities downgraded the country’s biggest banks, saying earnings estimates and valuations for the banks will remain under pressure and will decline even further in 2009. [ID:nBNG381855]

Manulife Financial climbed 11 percent to C$23.49 after the Office of Superintendent of Financial Institutions, Canada’s regulator of financial institutions, said it is reviewing capital rules for segregated funds to ensure they are appropriate in the current market environment. [ID:nN28390930]

The benchmark index has fallen 22 percent this month, with volatility at extreme levels. ($1=$1.28 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)

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