TSX gains 450 points as world stock markets rebound

Stock markets in Toronto and New York, along with exchanges in Europe and Asia, surged upward Monday.

Toronto's S&P/TSX composite index closed up 450 points, or more than five per cent, to 8,567 following last week's 12 per cent slide.

The upward movement follows U.S. president-elect Barack Obama's weekend pledge of a large public works plan to stimulate the economy and signs that North American automakers will get at least some of the government aid they've been seeking.

Investors were also encouraged by news that Chinese officials are meeting this week to discuss possible new steps to add to their already planned $586 billion US stimulus package.

In New York, the Dow Jones rose 298 points, while the Nasdaq gained 62 points.

In Europe, Britain's FTSE 100 index closed up 6.19 per cent, Germany's Dax rose 7.63 per cent and France's CAC 40 jumped 8.68 per cent.

In Asia, Hong Kong's Hang Seng index vaulted up 8.7 per cent, while Japan's Nikkei average rose 5.2 per cent.

The TSX energy sector rose more than seven per cent as oil prices bounced back after the president of the Organization of Petroleum Exporting Countries hinted at a "severe" production cut at OPEC's meeting on Dec. 17.

Light sweet crude rose $2.90 to $43.71 US a barrel on the New York Mercantile Exchange.

The Canadian dollar climbed 1.06 cents to 79.74 cents US as traders looked ahead to an interest-rate cut of a half percentage point or more by the Bank of Canada on Tuesday.

U.S. Congress near deal on $15B bailout package

In Washington, Democrats sent the Bush administration a draft of a bailout package for the Detroit Big Three automakers that's expected to come to a vote in Congress this week.

Under the plan, they would get $15 billion from an existing Energy Department fund created to help auto companies produce more fuel-efficient cars.

That's less than half the $34 billion US they've been pleading for, saying that without immediate aid at least one of the Big Three would go under.

In Toronto, federal Finance Minister Jim Flaherty said financial aid requests from the Canadian subsidiaries of the Big Three are "capable of being dealt with," without mentioning a specific amount.

GM Canada, Ford of Canada and Chrysler Canada submitted a request to the federal and Ontario governments last Friday for loans and a line of credit totalling $6 billion.

The news wasn't all good, as Canada Mortgage and Housing Corp. reported that housing starts fell to 172,000 at a seasonally adjusted annual rate in November, down from 211,800 in October.

The data coincided with an RBC Economics report that Canada's housing sector is entering a cyclical downturn but the risk of a U.S.-style meltdown is remote.

With files from the Associated Press