Roundup: Canadian stocks end higher on rising oil, Bombardier jet deal

Canada's main stock market in Toronto surged Wednesday on rebounding crude prices and a boost in Bombardier shares after the planemaker signed jet deal with Air Canada.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index rose 312.18 points, or 2.49 percent, to close at 12,867.16 points. Seven of the TSX index's eight main sub-sectors were higher.

Oil prices rocketed Wednesday as Iran supported a conditional output freeze deal proposed by top producers Russia and Saudi Arabia.

"The oil price has stabilized as there are reports of a meeting between Iran, Iraq and Venezuela taking place with the hopes that they too will stabilize the production of oil," said Michael J Smith, a Toronto currency expert at AFEX, a global non-bank provider of foreign currency services.

The West Texas Intermediate for March delivery moved up 1.62 U.S. dollars to settle at 30.66 dollars a barrel on the New York Mercantile Exchange, while Brent crude for April delivery increased 2.32 dollars to close at 34.5 dollars a barrel on the London ICE Futures Exchange.

Buoyed by the oil rally, TSX energy and mining groups surged 5.82 percent and 13.58 percent, respectively. First Quantum Minerals Ltd. rocketed 25.58 percent, and Teck Resouces added 18.59 percent.

Montreal-based Bombardier Inc. plans to cut its workforce by up to 7,000 people even as the company has finally signed a deal to sell its CSeries jets to Air Canada. Bombardier said Wednesday up to 2,000 of the total cuts will be contractors.

Most of the job losses will be in Canada and Europe and be partly offset by hiring in certain areas, such as its new CSeries aircraft program. Worldwide, Bombardier currently has 3,450 people working in its CSeries division, a figure the company expects to rise as it ramps up sales and production.

The company has 64,000 employees globally. The aerospace and rail equipment company says the job cuts will begin in the coming weeks and be completed by 2017.

The Canadian federal government has been rumored to be considering offering a bailout to the aerospace giant, similar to the 1 billion Canadian dollar lifeline that Quebec offered last year.

But in announcing the layoffs, Bombardier also revealed an Air Canada order for the largest model of Bombardier's new CSeries jets.

Air Canada has signed a letter of intent to purchase 45 of Bombardier's CS300 aircraft with options for an additional 30 planes. Based on the list price of the CS300, Bombardier says a firm order would be worth about 3.8 billion Canadian dollars, or 2.8 billion U.S. dollars.

Bombardier released both pieces of news while reporting its quarterly results, which showed that its 2015 revenue was 18.2 billion Canadian dollars, down from 20.1 billion in 2014.

Bombardier also announced plans to consolidate its shares, which have sold off heavily on the TSX since the start of 2015 as CSeries delays began to mount. From 4 Canadian dollars a share 18 months ago, its shares have slid to as low as 80 cents in recent weeks, posing a problem for the company, since it puts them in danger of being delisted from the TSX for being too cheap.

By Wednesday closing, Bombardier Inc. climbed 15.24 percent to 1.21 Canadian dollars per share, but Air Canada declined 12.13 percent to 7.39 Canadian dollars per share after the airlines reported a widening net loss and said its costs would fall this year if the Canadian dollar remains unchanged for 2015 levels.

On the economic front, Statistics Canada reported that Canadians bought 17.4 billion Canadian dollars of foreign securities in December, a second consecutive month of strong investment abroad. On the other side, foreign investors reduced their holdings of Canadian securities by 1.4 billion Canadian dollars, led by federal government debt securities.

The Canadian dollar was traded higher at 0.7297 U.S. dollar, compared with Tuesday's closing rate of 0.7204 U.S. dollar. Enditem