Roger Biduk - Bay Street Soars Over 600 Points

Roger Biduk writes:

The Toronto Stock Exchange's main index was up more than 5 percent at midday Friday, as investors cheered a series of moves by central banks and governments to restore confidence in the global financial system.

The big bounce came on news the U.S. government was crafting a sweeping multibillion-dollar plan to rescue the country's battered financial sector and placing a temporary halt on short-selling.

By around noon, the S&P/TSX composite index was up 675.02 points, or 5.5 percent, at 12,739.59, with all of its 10 main groups higher.

The jump at the open - echoing surges on New York and other global markets -- also reflects the "great unwinding" in the United States, said Bill Harris, portfolio manager at Avenue Investment Management.

Prime Minister Stephen Harper said the Canadian government is not considering a bailout plan for the country's banks, which are in good shape despite the financial crisis in the United States.
Nor was there an announcement by Canadian regulators to curb short-selling. The practice of borrowing a stock on a bet that its price will fall, is seen as contributing to sharp declines in equity markets since the credit crunch began in the U.S. mortgage market last year.

The rise on Friday came after a 1.6 percent rally the previous session after the world's top central banks injected billions of dollars into the financial system to ease seized-up money markets.

The heavily weighted financial services sector rose 5.2 percent with Royal Bank of Canada up 4 percent to C$49.90, while Canadian Imperial Bank of Commerce climbed 4.7 percent to C$62.46.

The heavyweight energy sector jumped 5.9 percent as oil rose to around $100 a barrel on expectations the U.S. government rescue plan would help shore up confidence in battered financial markets.

In the oil patch, Canadian Natural Resources soared 8.9 percent to C$84.84.

The materials group added 7.7 percent. Among the gainers in the sector, First Quantum Mineral surged 13.9 percent percent to C$49.87 and Potash Corp of Saskatchewan Inc climbed 11.4 percent to C$186.03.

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Roger Biduk is an investment advisor and services clients in Montreal, Hudson, West Island and throughout the provinces of Quebec & Ontario.