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Roundup: Canadian stock market rebounds following China rate cut

Xinhua, August 26, 2015 Adjust font size:

Canada's main stock market rebounded Tuesday after Chinese central bank announced a rate cut overnight following Monday's volatile global rout.

Toronto Stock Exchange's benchmark Standard & Poor's /TSX Composite Index regained 98.19 points or 0.75 percent to close at 13,150.93 points.

S&P/TSX surged 311.7 points to open Tuesday's trading at 13,364.44 after a loss of more than 400 points Monday. By noon, it was the biggest daily gain for the year.

The 25-basis-point cut for the one-year benchmark lending rate by the People's Bank of China helped global markets rebound. Investors fretting over the global impact of slower Chinese growth triggered panic selling Monday around the world.

"China's fifth rate cut since November shows the central bank moving to avert a downward spiral in the equity markets and real economy," noted Tom Orlik, Bloomberg chief Asia economist.

Tuesday's move underlines China's determination to support growth, Orlik said.

Boosted by the latest Chinese policy, six of the TSX index's eight main sectors registered gains, with financials up 1.97 percent, utilities up 1.92 percent and energy up 1.51 percent.

Banks, which will report quarterly results this week, were the index leaders, with Toronto-Dominion Bank jumping 4.1 percent and Royal Bank of Canada advancing 3.7 percent.

Bank of Montreal rallied 4.6 percent after reporting a third-quarter profit that topped expectations.

Energy shares also gained, as Suncor Energy rose 3.4 percent to 34.05 Canadian dollars.

Barrick Gold Corp was the most influential decliner, falling 4.3 percent to 9.16 Canadian dollars.

In New York, the Dow Jones industrial average closed down 204.91 points at 15,666.44 after plunging 588 points on Monday.

In commodity markets, the October crude contract ended the day up 1.07 U.S. dollars at 39.31 U.S. dollars a barrel while October natural gas rose 3.9 U.S. cents to 2.695 U.S. dollars per thousand cubic feet.

December gold was down 15.30 U.S. dollars at 1,138.30 U.S. dollars an ounce, while September copper advanced five cents to 2.31 U.S. dollars a pound.

Back on Bay Street, the Canadian dollar went down Tuesday to 0.7504 U.S. dollar, compared with 0.7576 U.S. dollar Monday. Endit