TORONTO (Reuters) - The Toronto Stock Exchange’s main index rallied to its sixth straight gain on Friday as financials surged higher on hopes that U.S. stimulus efforts unveiled this week would help boost the economy.
After adjusting more than 150 points higher minutes after the closing bell, the S&P/TSX composite index ended the day up 516.85 points, or 5.9 percent, at 9,270.62.
The TSX was up 13.7 percent for the week but down 5 percent for the month.
The financial services sector rose 11.8 percent, drawing support from buoyant U.S. stocks.
The hope is that stimulus efforts this week in the United States -- including an $800 billion lending facility by the Federal Reserve -- could signal a sustained rally, said Andrew Pyle, wealth adviser with ScotiaMcLeod in Peterborough, Ontario.
“The market really believes, I think, that was an inflection point. That provided enough support, finally, for the financial market to start some sort of recovery process,” said Pyle. “There is a little more confidence in the U.S. financials.”
Other factors helping lift the market included end-of-month portfolio adjustments, bargain-hunting and thin volumes with U.S. markets open only a half day after being closed for Thanksgiving on Thursday, analysts said.
The oil and gas sector rebounded to end the day up 4.1 percent as the price of oil turned positive and was up at $55.26 a barrel at 4:24 p.m. EnCana Corp rose 6.2 percent to C$60.00
Oil company Nexen, which rose sharply on Thursday on renewed takeover rumors, fell 2 percent to C$25.50.
The materials group climbed 3.2 percent even as metal prices were softer. Cameco Corp was up 2.3 percent to C$22.15. Earlier, it said it is suspending uranium hexafluoride production at its Port Hope, Ontario, plant until the second half of 2009, due to a contract dispute with its supplier of hydrofluoric acid.
Earlier, a negative tone in the markets was reinforced by investor concern that the U.S. economy may sputter further if consumers keep their wallets shut during the kickoff weekend for the Christmas shopping season.
But that worry was shrugged off on growing expectation the market is trying to find a bottom.
“We will get by the heart, or the root cause, of the things that ail us, which is the credit financial crisis,” said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.
“As we look at the economic fallout from that, while it will be a long drawn-out recovery process ... there is value in stepping into the market selectively,” Taylor said.
Reporting by Jennifer Kwan; editing by Rob Wilson