TSX rallies more than 200 points led by resource stocks

Overall, the TSX has risen 4.7% since launching a steady climb last Friday.

Metals and mining stocks were by far the leading gainer, rising a stunning 11%.

Pushing the index higher were high-profile industry news, which saw First Quantum Minerals (TSX:FM) outline plans on Tuesday to reduce its debt by at least US$1 billion over the next six months. The company said it plans to sell off assets and make other changes, which helped its shares gain 18% to $8.85.

Stock in Teck Resources (TSX:TCK.B) jumped about 14% as the company announced a silver output deal that includes a US$650-million advance payment.

In commodities, the December gold contract lifted $2.30 to end at $1,148.70 an ounce and December copper added a penny to US$2.37 a pound.

Traders were reconsidering some of the pessimism which has gripped stock markets in recent months, suggested Brian Belski, chief investment strategist at BMO Capital Markets.

He pointed to the weaker loonie, China’s struggling economy and uncertainty surrounding the federal election, as some major motivating factors that have started to subside.

“We’ve come out of a period of intense emotion and volatility and calmer heads are prevailing,” he said.

“I think Canada is setting up for a pretty big rally in the fourth quarter. Most portfolio managers that we speak with are sitting on their hands waiting for the election to come through, and the believability of oil and energy stocks hitting a bottom … is becoming more of a reality.”

The heavily-weighted energy sector was among the advancers, rising 3% even as the November contract for benchmark crude oil lost 72 cents to US$47.81 a barrel. The commodity reversed direction for the first time in four sessions after slipping below US$45 a barrel last week.

November natural gas gained less than half a cent to US$2.47 per thousand cubic feet.

In New York, the Dow Jones industrial average rose 122.10 points to 16,912.29, while the S&P 500 index gained 15.91 points to 1,995.83 and the Nasdaq rose 42.79 points to 4,791.15.

The Canadian dollar was down 0.22 of a U.S. cent at 76.54 cents US.

In corporate news, Canadian Oil Sands Ltd. (TSX:COS) announced it was adopting a poison pill defence plan in the face of a hostile takeover offer from oilsands giant Suncor Energy Inc. (TSX:SU).

The new shareholder rights plan could be triggered under certain circumstances if anyone buys 20% or more of the company. At that point other shareholders would be able to buy stock at a discount, making the acquisition less attractive to the hostile bidder.

Shares were up 27 cents or nearly 3% at $9.55 on the TSX, while Suncor traded 58 cents higher at $35.45.