By John Tilak
TORONTO (Reuters) - Canada's main stock index jumped more than 1 percent on Wednesday, its sharpest one-day percentage gain in more than eight months, as higher commodity prices fueled a rise in shares of gold and oil and gas producers.
The surge in gold-mining shares, which have languished this year, played the biggest role in driving up the market as they rose about 7 percent as physical buyers scooped up the precious metal on the back of a recent selloff.
The market received further support from Barrick Gold Corp (Toronto:ABX.TO - News) after the world's biggest gold miner reported stronger-than-expected quarterly results and said it was reining in spending.
Investors brushed aside data that showed orders for long-lasting U.S. manufactured goods recorded the biggest drop in seven months in March as well as a U.S. gauge of planned business spending that rose only modestly.
Wednesday's advance was the fifth straight for the Toronto index as it recovered from one of its biggest selloffs in several months and outperformed U.S. stocks.
"We're putting on a burst of steam," said Fred Ketchen, director of equity trading at ScotiaMcLeod. "Our market has been lagging behind. Some people are looking at that and saying, 'there's an opportunity here for a revival'."
Despite the gains of the past week, the index is still down 1.3 percent since the start of the year. That compares with a jump of more than 10 percent for the S&P 500.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) closed up 179.49 points, or 1.48 percent, at 12,270.43. Eight of the 10 main sectors on the index were higher.
The gains helped erase some the index's huge losses of earlier this month, triggered by a rout in commodity prices, including the biggest single-day drop in gold prices ever.
Barrick Gold rose 7.6 percent after it said it was scaling back capital spending and has made progress in controlling costs. Its first-quarter profit dropped but was still slightly ahead of market expectations.
"The market is rallying off what appears to be a respectable quarter," said Matt Skipp, president of SW8 Asset Management. "(Barrick is) the most oversold and heavily shorted major gold company in North America. It probably deserves a bounce today."
The stock, which rose to C$19.38, is down 57 percent since hitting a 52-week high in June 2012.
Barrick's jump and higher gold prices, up 1.2 percent, helped the index's materials sector add almost 5 percent.
Energy shares climbed 2.3 percent as oil prices rose.
BlackBerry (Toronto:BB.TO - News) said it plans to fill one of the biggest gaps in the app line-up on its new BlackBerry 10 devices with a long-awaited Skype application. The smartphone maker climbed 3.5 percent to C$15.25.
(Editing by Peter Galloway)