* TSX rises 3.8 percent, extends Tuesday’s gains
* Fed cuts key rate by half a point to 1 percent
* Nexen climbs after profit beats expectations (Adds quotes, details)
By Jennifer Kwan
TORONTO, Oct 29 (Reuters) - The Toronto Stock Exchange’s main index closed 3.8 percent higher on Wednesday as energy and materials issues rose on stronger commodity prices, with the gains supported by the U.S. Federal Reserve’s half-point interest rate cut.
The market was encouraged by the U.S. central bank’s interest rate move, which took its key rate down to 1 percent, in an attempt to stimulate the economy.
“The real big story has been the rate decrease in the States,” said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.
“With the rate decrease it affects the (U.S.) dollar. If the dollar goes down, oil goes up — they are inversely related — so that has been helping to push the market up in Toronto,” Ibel said.
The S&P/TSX composite index .GSPTSE was up 349.93 points, or 3.82 percent, at 9,501.56, extending the 7.2 percent gain it logged on Tuesday. Eight of its 10 main groups were higher.
The heavily-weighted energy sector rose 8.6 percent as the price of crude rose above $67 a barrel [ID:nN29500128].
Nexen Inc NXY.TO climbed 14.5 percent to C$18.60 after Canada’s No. 4 independent oil explorer said quarterly profit more than doubled, beating market expectations. [ID:nBNG218049]
The rally in resource issues comes as investors shopped for beaten-down stocks, analysts say.
“It’s a move back to more risky assets,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
The financial services sector climbed 1.2 percent, helped by Manulife after Canada’s insurance regulator eased guidelines on capital requirements related to segregated funds. [ID:nN28412537]
Elsewhere, BCE Inc (BCE.TO) was down 1.7 percent at C$34.37, after it posted a lower quarterly profit, due mostly to restructuring charges [ID:nN28399225].
Maple Leaf Foods (MFI.TO) rose 3.2 percent to C$7.40. Earlier, the company posted a quarterly loss as charges mounted from a recall of tainted meat that the company said was now complete. [ID:nN29453287]
Market volume was a hefty 609.1 million shares worth C$6.82 billion. Advancers outpaced decliners 863 to 725. The blue chip S&P/TSX 60 index .TSE60 closed 21.63 points higher, or 3.9 percent, at 576.21.
South of the border, the Dow Jones industrial average .DJI fell 74.16 points, or 0.82 percent, at 8,990.96, while the Nasdaq composite index .IXIC ended up 7.74 points, or 0.47 percent, at 1,657.21. ($1=$1.23 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)