TSX sharply jumps more 2pc on resources, banks

TORONTO: Toronto's main stock index closed sharply higher on Tuesday, posting its biggest gain in nearly two weeks as resource and financial issues rose on higher commodity prices and surprisingly good bank earnings.

Canadian investors also took a cue from US markets, where many players jumped back into stocks before a highly anticipated speech by Federal Reserve Chairman Ben Bernanke on Friday, which could signal more stimuli for the economy.

Energy and financial issues powered the TSX's gains as oil rose on better risk appetite and continued fighting in Libya, while the first of a wave of Canadian bank earnings due over the next two weeks beat estimates.

Among the most influential gainers, Canadian Natural Resources surged 6 percent to C$34.88, while Bank of Montreal jumped 4.3 percent to C$59.80 after it reported double-digit profit growth due to stronger capital markets revenue and a recent acquisition.

"Investors are just desperate for some good news out there and they've been buffeted by the volatilities from the political inertia both in Europe and the US to deal with some of these problems," said Michael Sprung, president at Sprung & Co Investment Counsel.

He noted that data out of China on Tuesday showing manufacturing growth there was slowing only slightly was positive for the outlook on commodities, lifting copper prices in particular.

The Toronto Stock Exchange's S&P/TSX composite index ended up 269.97 points, or 2.24 percent, at 12,338.3, its best one-day rally since Aug. 10. Nine of the 10 main groups were firmer, as materials were dragged down by sliding gold miners.

The biggest gainer on the index was Potash Corp, which climbed 6.1 percent to C$53.81 after it was upgraded to "outperform" from "sector perform" by Scotia Capital.

Holding back the day's big gains, precious-metal stocks plunged nearly 4 percent as the price of gold tumbled from its first ever foray above $1,900 an ounce in the sharpest one-day drop in 18 months.

Goldcorp Inc sank 5.3 percent to C$50.79, while Barrick Gold dropped nearly 3 percent to C$50.10.

Copyright Reuters, 2011