TSX rises as Traders Snap up bargains

The Toronto stock market closed higher Tuesday as traders bought into stocks that sustained steep losses in the previous session when disappointing Chinese growth data sent commodities and resource stocks tumbling.

The S&P/TSX composite index gained 115.04 points to 12,119.92 after the market registered its biggest one-day tumble since last June and the lowest close since midNovember, plunging 333 points.

The TSX was also heavily pressured Monday by gold prices, which fell US$140 an ounce to their lowest level in more than two years amid fears that European governments may sell the precious metal as part of their debt-fighting measures. Prices recovered slightly Tuesday but were well off session highs, closing up $26.20 to US$1,386.80 an ounce.

Monday’s plunge left the TSX down 3.45% year to date.

The Canadian dollar gained US0.47¢ to US97.99¢ after falling more than a cent on Monday.

U.S. indexes were also positive after New York indexes sustained their biggest drops of 2013 as investors looked to signs of further strength in the housing market ahead of the spring buying season.

The Commerce Department reported that U.S. builders broke ground in March at the fastest pace in almost five years. Housing starts came in at a seasonally adjusted annual rate of 1.04 million, up by 7% from February.

The Dow Jones industrials ran up 157.58 points to 14,756.78 after plunging 266 points Monday, interrupting a rally that has gone on practically non-stop all year.

The Nasdaq composite index was ahead 48.14 points to 3,264.63 while the S&P 500 index advanced 22.21 points to 1,574.57.

The positive session came amid a worsening outlook for the world economy this year from the International Monetary Fund. It cut its forecast for global growth to 3.3% this year, down from its January forecast of 3.5%. The IMF predicts government cuts will slow U.S. growth and keep the euro currency alliance in recession.

The IMF is keeping its prediction of 4% global growth in 2014

TSX gains were led by the base metals sectors, the worst hit components on Monday.

The major exception was the gold sector, which finished about 1% lower after falling about 9% on Monday, leaving the sector down around 37% year to date. Kinross Gold dipped 6¢ to $5.48.

Barrick Gold continued to fall heavily, moving down $1.06 or 5.22% to $19.24 after plunging 11.5% Monday to its lowest level in at least a decade.