September 26, 2011 / 9:26 PM / 7 years ago

CANADA STOCKS-TSX jumps 2 pct as euro zone optimism takes hold

 * TSX rises 244.32 points, or 2.13 percent, to 11,707.19
 * Rebounds from 14-month low reached earlier in session
 * Nine of 10 sectors higher; banks, energy drive gains  (Adds details, comments)
 By Trish Nixon
 TORONTO, Sept 26 (Reuters) - Toronto’s main stock index jumped more than 2 percent on Monday, bouncing back from a 14-month low, as hopes European leaders will commit more cash to bail out debt-laden euro-zone nations revived risk appetite.
 European officials are working on ways to magnify the financial firepower of the euro zone’s rescue fund to fight the region’s debt crisis more effectively, a senior European Central Bank policymaker said. [ID:nLDE78P01H]
 But euro zone officials played down reports of nascent plans to halve Greece’s debts and recapitalize European banks, saying no such plan is yet on the table.
 “There just seems to be a mood and nothing more than that,” said Michael Smedley, chief portfolio manager at Morgan Meighen & Associates.
 “There are no new panic factors occurring, no particular stress in the market, and a slight suggestion that there will be a reason to look more warmly on the European situation - though there seems no tangible evidence of that.”
 The index’s economically sensitive financials group jumped 3.2 percent. Royal Bank of Canada (RY.TO) was the most heavily weighted advancer, up 4.1 percent at C$47.98, while Toronto-Dominion Bank (TD.TO) gained 4.1 percent to C$73.85.
 “Just like in 2008, the financial group is the focal point for the current state of events,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
 “As far as the Canadian banks are concerned there is more optimism on that front because they came out of the last crisis in really good shape,” he added.
 After a volatile session, the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 244.32 points, or 2.13 percent, at 11,707.19, with nine of its 10 sectors higher. Earlier the index had fallen to 11,293.63, its weakest point since July 2010.
 Markets have whipsawed for months over fears of European debt contagion and hopes that officials will finally contain the crisis. Last week the TSX tumbled almost 7 percent, entering bear market territory.
 “We had a really steep selloff last week, and no dramatic developments on the negative side over the weekend, so you’re seeing some of the fear abate today,” Picardo said.
 “But the situation still remains extremely uncertain and I think we could continue to see sentiment turn on a dime this week.” 
 Investors were unfazed by weak commodity prices. Energy issues rose 3 percent, while oil traded flat. The index’s materials sector rallied 1.5 percent even as gold prices tumbled 2 percent and copper entered its fourth down week. [O/R] [MET/L]
 Suncor Energy (SU.TO) rose 5.1 percent to C$27.66, while Barrick Gold (ABX.TO) was up 2.5 percent at C$48.94, and First Quantum Minerals (FM.TO) surged 9 percent to C$14.95.
 Ivanhoe Mines (IVN.TO) was the index’s heaviest decliner, The Vancouver-based miner fell 9.2 percent to C$15.00 after Mongolia said it plans to renegotiate a landmark deal to develop the huge Oyu Tolgoi copper-gold project in southern Mongolia. [S1E78P0AE]
 In other company news, shares of Intact Financial (IFC.TO) jumped 4.4 percent to C$56.15 after the insurer closed its C$2.6 billion ($2.5 billion) acquisition of the Canadian arm of French insurance group AXA (AXAF.PA). [L3E7KQ1BS]
 Acquisition-hungry Valeant Pharmaceuticals International VRX.TO said it will raise its takeover offer for Afexa Life Sciences FXA.TO to C$88 mln ($85 million), topping Paladin Labs’ hostile bid for the maker of Cold-FX flu medicine. Afexa’s stock jumped 14.7 percent to C$86, while Valeant rose 2 percent to C$40.16. [S1E78P0OX]
($1=$1.03 Canadian  (Editing by Jeffrey Hodgson and Peter Galloway)                 

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below