Canadian shares halted a six-day retreat after the Chinese government cut its interest rate on the heels of Monday's volatile global selloff.
The benchmark Standard & Poor’s/TSX Composite Index (TSE:OSPTX) rose 2.6% to 13,386.37 at 12:28 p.m. in Toronto. Seven shares advanced for every issue that declined as nine out of ten share groups were in the positive territory.
The energy sector, the main index's second most heavily weighted group, jumped 4.2% as oil rebounded. Suncor Energy (TSE:SU), Canada's largest oil sands producer, rose 4.8% to C$34.51. Enbridge (TSE:ENB), Canada's largest pipeline company, gained 1.1% to C$51.12. Canadian Natural Resources Limited (TSE:CNQ), Canada’s second-largest energy producer, rose 3.1% to C$26.81.
Encana (TSE:ECA) jumped 6.7% to C$8.25. Canada’s largest natural gas producer said it had agreed to sell all of its Haynesville natural-gas assets in northern Louisiana for $850 million, to a joint venture formed by GeoSouthern Haynesville LP and funds managed by GSO Capital Partners LP. Calgary-based Encana said it would use the proceeds to pay down debt.
Light, sweet crude for October delivery recently traded up 2.8% at $39.29 a barrel on the New York Mercantile Exchange.
Financials, the index's most heavily weighted sector, rose 3.5%. Royal Bank of Canada (TSE:RY), which has the heaviest weighting in the index, rose 3.9% to C$73.47. Toronto-Dominion Bank (TSE:TD), the second-largest bank by market value, rose 4.3% to C$51.12.
Bank of Montreal (TSE:BMO) jumped 4% to C$68.84 after Canada's fourth-largest bank reported better-than-estimated profit in its fiscal third quarter, helped by gains in consumer banking and wealth management.
The materials sub-index, which includes mining shares, was the only laggard with a 0.3% drop. Goldcorp (TSE:G), Canada’s largest gold miner by market value, retreated 1.8% to C$18.42. Barrick Gold (TSE:ABX), Canada’s second-largest gold miner, slid 2.1% to C$9.36.
Spot gold was down 1.1 percent at $1,141.56 an ounce, while U.S. gold futures for December delivery were down $11.90 an ounce at $1,141.50.
In economic news, Bank of Canada deputy governor Lawrence Schembri said on Tuesday that the risks that booming housing markets pose to the economies in Canada and other similar nations are being well managed by credible macroprudential policies.