CANADA STOCKS-TSX rebounds as central banks, U.S. data allay fears

Tue Jun 25, 2013 5:09pm EDT

* TSX rises 168.56 points, or 1.42 percent, to 12,005.42
    * All 10 major index sectors advance
    * CML surges 47 percent after takeover offer
    * TD climbs 1.9 percent, biggest single influence on index
    * Tim Hortons advances after shareholder comments

    By John Tilak
    TORONTO, June 25 (Reuters) - Canada's main stock index
recorded one of its biggest percentage jumps of the year on
Tuesday after robust U.S. data and comments from major central
banks alleviated concerns about the economic recovery and
monetary policy.
    A surge in shares of financial companies, coupled with gains
in every other major sector, helped the market bounce back from
a big loss in the previous session.
    Data showed orders for long-lasting U.S. manufactured goods
rose more than expected in May and a gauge of planned business
spending increased for a third straight month, the latest signs
of a pick-up in economic activity in the United States.
 
    The market was further supported by a 47 percent jump in CML
HealthCare Inc after LifeLabs Medical Laboratory
Services said it would acquire the medical diagnostic services
provider in a deal valued at about C$965 million ($917 million).
 
    Toronto stocks have been under pressure since the Fed
signaled last week it is likely to tighten monetary policy. The
pressure was exacerbated by worries about liquidity and economic
growth in China, a major market for Canadian resources.
    China's central bank said it will not turn the screws too
hard on banks in its drive to curb easy credit, seeking to
soothe fears of a banking crisis that had driven Chinese stocks
to their lowest level in nearly 4-1/2 years.  
    In the United States, two Federal officials played down the
prospect of a speedy end to the U.S. central bank's stimulus
program. 
    "The selloff over the past week was threatening to turn
ugly, but today's advances point to the fact that the concerns
of the last few days have dissipated to some extent," said Elvis
Picardo, strategist and vice president of research at Global
Securities in Vancouver.
    "China's central bank does have the muscle to dictate which
way it wants things to go," he added. "Now that they've come out
and reassured the markets, there's a feeling that they have
things under control."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 168.56 points, or 1.42 percent, at
12,005.42. All of the 10 main sectors on the index were higher.
    The materials sector, which includes mining stocks, gained
1.1 percent. Miner Teck Resources Ltd rose 3.4 percent
to C$21.94.
    Financials, the index's most heavily weighted sector, were
up 1.3 percent. Toronto-Dominion Bank climbed 1.9
percent to C$82.79 and played the biggest role of any single
stock in leading the index higher.
    Investors also digested news that Royal Bank of Canada
 and some influential fund managers plan to set up a new
stock exchange to challenge the dominant TMX Group Ltd,
one that would limit the role of controversial high-frequency
trading strategies. TMX shares fell 2.3 percent
to C$42.80.
    Smartphone maker BlackBerry advanced 3.9 percent to
C$15.32 as expectations for its quarterly report on Friday rose.
    In other company news, Scout Capital Management, a U.S.
hedge fund, said it is urging Tim Hortons to increase
its debt levels so it can fund a share buyback. Shares of the
coffee and doughnuts chain climbed 3.2 percent to C$56.29.
    CML's rise to C$10.60 helped the healthcare sector surge
13.5 percent.
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