TORONTO: Canadian stocks jumped more than 2 percent to hit a one-month high on Thursday, buoyed by optimism over a long-awaited deal among European policymakers to tackle the region's debt crisis.
Global stocks were lifted by an agreement on behalf of European leaders that included a plan to leverage the euro zone's bailout fund to 1 trillion euros, a 50 percent haircut for private holders of Greek debt and bank recapitalization.
"What we're seeing, at least at the outset, is a relief rally," said Andrew Pyle, wealth advisor and associate portfolio manager at ScotiaMcLeod. "Sustaining this is really going to depend on whether the market actually believes this is the beginning of something more constructive going forward."
Financial stocks, up 2.5 percent, played the biggest role in leading the market higher. Canadian banks have traded in sympathy with European lenders for much of the crisis even though they have little or no exposure to Greece.
Royal Bank of Canada did the most to lead financial sector higher, posting a 3.1 percent gain to C$49.64.
By midday, the Toronto Stock Exchange's S&P/TSX composite index was up 269.29 points, or 2.21 percent, at 12,455.35. It rose as high as 12,467.92, its strongest level since Sept. 9.
Energy stocks, up 3 percent, were also a major driver of gains. Oil jumped to $112 a barrel as the European deal and supportive US data eased concerns that economic weakness could curb energy demand.
Shares of Suncor Energy Inc, up 4.5 percent at C$32.68, led the sector.
A 7 percent rally in base metal miners also help drive the influential materials sector higher, as copper prices jumped on the European news.
Teck Resources led the sector, gaining 8.4 percent to C$40.45 after news its third-quarter net income more than doubled, driven by strong results from its coal and copper businesses.
First Quantum Mining was also among the biggest gainers, jumping 11.1 percent to C$20.67.
After reporting a doubling in its third-quarter profit, Potash Corp shares were up 0.8 percent to C$50.16, as strong grain prices boosted demand for the world's top fertilizer maker's products.
Fellow miner Barrick Gold climbed 0.2 percent to C$48.29, after reporting a 45-percent increase in its quarterly profit, driven by a sharp increase in bullion prices.
In other Canadian company news, BlackBerry maker Research In Motion Ltd's shares rose 0.6 percent to C$21.02, a day after plunging nearly 8 percent. RIM was also hit by a class action lawsuit filed by consumers in the US and Canada for a days-long service outage earlier this month.
Solid US economic news contributed to the market's euphoria, as data showed third-quarter GDP growing at its fastest pace in a year.
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