TSX has biggest jump in more than 2 years
5:18 PM, E.T. | November 30, 2011
Canadian stocks jumped more than four percent Wednesday in their biggest single-day gain in more than two years, pushed up by an agreement by global central banks to tackle the eurozone debt crisis and by a move by China to ease credit.
Commodity prices, particularly for oil, gold and base metals, rose on renewed investor optimism for the global economy, lifting the TSX's heavily weighted materials sector 6 percent.
Miner Goldcorp rose 5.4 percent to $53.98 and Barrick Gold was up 2.8 percent at $52.90, to lead gains.
Energy issues, up 4.7 percent, and financial stocks, up nearly four percent, also were big contributors to the rally as rejuvenated investors pulled their money from the security of government bonds into riskier plays.
Suncor Energy jumped 5.1 percent to $30.72 to lead energy gains. Royal Bank of Canada led financials, gaining five percent to $47.26.
The move by the TSX index mirrored hefty gains on other global markets as central banks from the world's leading economies, including the Bank of Canada, the U.S. Federal Reserve and the European Central Bank, agreed to lower the cost of dollar swap lines by 50 basis points, as well other measures.
"Santa has come early and he happens to look a lot like (Fed Chairman) Ben Bernanke, right down to the beard, and in his bag he has lots and lots of U.S. dollars available to exchange for euros in unlimited amounts," said Gavin Graham, president of Graham Investment Strategy.
"All the risk assets, whether it's gold or copper or oil or the Canadian dollar, are all shooting up and it's likely that we'll see a continuation of that (for the rest of the year)," Graham said.
The Toronto Stock Exchange's S&P/TSX composite index closed up 471.61 points, or four percent, at 12,204.11. It was the TSX's biggest single-day gain since March 23, 2009 when the market finished up more than five percent.