TORONTO (Reuters) - Toronto’s main stock index rallied to its highest close in more than a week on Monday, driven by bargain-hunting, optimism over the euro zone debt crisis and acquisition activity on both sides of the border.
BlackBerry maker Research In Motion surged nearly 10 percent to C$26.59, moving into the spotlight as a potential takeover target after news that Google is set to buy Motorola Mobility for about $12.5 billion in cash.
“We saw a fairly aggressive acquisition by Google in the handset sector so that’s definitely giving RIM a bit of a boost ... potentially it puts them on the radar for a potential acquisition,” said Youssef Zohny, portfolio manager at Van Arbor Asset Management in Vancouver.
“It’s putting pressure on Microsoft and Apple and other tech companies to look at a lot of assets in that sector, and definitely RIM has been beaten up over the last few months and there’s definitely some value there.”
Energy shares climbed 1.5 percent as oil prices jumped nearly $2 a barrel on a broad rebound in risk appetite, partly driven by expectations that European leaders will come up with solutions to the region’s debt crisis.
Among them, Suncor Energy rose 1.7 percent to C$32.43, and Canadian Natural Resources added 1.5 percent to C$36.88.
“I think things have just settled down, they’ve had such a precipitous drop,” said Greg Eckel, portfolio manager at Morgan Meighen & Associates.
“I think what’s happening now in that the catastrophic news flow has for now somewhat diminished, so I think you’re starting to see a little more comfort, what hopefully is some bottom fishing and can carry the market up a few points.”
The Toronto Stock Exchange’s S&P/TSX composite index closed up 141.41 points, or 1.13 percent, at 12,683.61, its highest finish since August 3. All of the index’s 10 sectors were stronger, including financials, up 1.4 percent, as recently battered Manulife Financial jumped 4.2 percent to C$13.73.
Toronto-Dominion Bank was also a top gainer, up 1.3 percent at C$76.88 after announcing a deal to buy MBNA Canada’s credit card business.
Helping to boost confidence and commodity prices, data showed the Japanese economy shrank much less than expected in the second quarter as companies made strides in restoring output after the earthquake in March.
U.S. data, however, was still disappointing for the market with a report showing manufacturing in the New York area contracting for a third straight month in August.
Reporting by Claire Sibonney; editing by Peter Galloway