TSX relief rally snaps 7-day decline

By Claire Sibonney

TORONTO (Reuters) – Toronto’s main stock index bounced back Thursday from a seven-day fall as some positive U.S. economic data and higher commodity prices prompted investors to pick up worn-down shares.

Data that showed record-high U.S. exports and a smaller trade deficit in April eased fears about a stalled U.S. economic recovery that had weighed on the market for days.

The data helped economically sensitive financial stocks rise 0.4 percent. Among them, Royal Bank of Canada was the index’s second most heavily weighted gainer, rising 0.9 percent to C$54.86.

Resource shares led the advance, with the index’s materials group up 1.5 percent and the energy group up 0.3 percent as U.S. crude futures and gold prices marched higher.

Corn futures also hit a record high, spurring a rally in fertilizer shares. Potash Corp was the most influential climber on the index, jumping 3.4 percent to C$53.98, while Agrium Inc rose 2.6 percent to C$82.49.

“We’re seeing some buyers coming back into the market and nibbling a little bit,” said David Cockfield, senior vice president and portfolio manager at MacNicol and Associates Asset Management.

“Let’s face it, these stocks got fairly significantly beaten up over the last little while.”

The Toronto Stock Exchange’s S&P/TSX composite index ended up 71.95 points, or 0.55 percent, at 13,255.74. Eight of the 10 main sectors were higher.

It lost about 5 percent of its value in the seven sessions leading into Thursday.

Cockfield noted the index is currently holding with significant support above the 40-week and 50-week moving averages.

Sino-Forest rose for a second day, gaining 4.7 percent to C$5.15 and lifted by speculative buying and short-covering following a short-seller’s damning report last week that crushed the Chinese forest plantation company’s stock.