The Toronto Stock Exchange jumped 890 points Tuesday, playing catch-up to a massive gain by the Dow Jones on Thanksgiving and a strong performance by Asian markets overnight.
After markets closed, the S&P/TSX Composite Index was up 9.82 per cent, or 890.50 points, to finish the day at 9,955.66.
In early trading, the TSX had opened a whopping 1,428.86 points higher, buoyed by a jump in Asian markets as more investors seemed willing to put their faith in the markets.
In U.S. markets, the Dow Jones industrial average closed at 9,310.99 points, a modest loss of 76.62. On Monday, it had skyrocketed 936.42 points, its largest single-day point gain since 1933.
And after an early gain of 37 points, the Nasdaq was down 65.24 points at closing. The S&P 500 Stock Index opened 40 points up but fell to a loss of 5.34.
The TSX jump and modest losses by the other markets can be attributed to the fact that European and North American governments have similar plans to inject money into their banking systems in an effort to ease the global credit crisis, BNN's Michael Kane said on Â鶹´«Ã½net.
"What it is, is the market reacting to the re-pricing of equities, of stocks," Kane said. "There was a lot of fear that this situation among the banks was not going to get solved."
On Tuesday, U.S. President George Bush announced that the federal government would use $250 billion of its rescue package to buy shares in American banks, partly in a bid to encourage inter-bank lending.
On Sunday, European leaders decided on refinancing measures for financial institutions, including a pledge to buy stocks in banks.
The moves are part of a coordinated international effort to ease the global credit crunch that has sent markets plunging.
Kane said that many investors who got out of the markets as stocks began to slide are now buying back in.
Asian markets had a big trading day Tuesday as Japan's benchmark Nikkei 225 index surged 1,171.14 points, or 14.15 per cent, after plunging 24 per cent last week.
Hong Kong's Hang Seng index rose by 3.2 per cent after a 10 per cent gain on Monday.
European markets followed Asia higher in early trading, with benchmarks in Britain, Germany and France opening up more than five per cent, before cooling slightly by the afternoon.
London's FTSE 100 closed at 4,394.21, a gain of 137.31 points.
In late-day trading, Germany's DAX was up 3.4 per cent and France's CAC-40 was up 2.37 per cent.
The Canadian dollar regained some lost ground Tuesday, rising more than two cents against the U.S. greenback to 86.09 cents US at closing. Higher crude oil prices and a weaker American currency were the main reasons for the jump.
