Markets closed sharply higher on Tuesday as a dose of healthy corporate earnings in Canada and the U.S., and an optimistic words on the health of the economy from the Bank of Canada kicked started a rally.

The Toronto Stock Exchange 300 composite index closed up 80.26 points to 7,841.57.

Before the session opened, the Bank of Canada made a premptive strike on an overheating economy by increasing its overnight interest rate to 2.25%, a jump of 25 basis points.

Overall, nine of the TSE’s 14 sub-indices sectors closed higher, led by a 3% jump in the tech-heavy industrial products.

Volume was 158.4 million shares worth $2.58 billion as advancers outpaced decliners 590 to 482 with 213 unchanged.

Among industrial stocks, Nortel Networks added up 49 cents to $6.24, Research In Motion gained $2.02 to $34.89, and Celestica climbed $2.69 to $54.

Bombardier Inc., despite a strike at three Montreal-area aerospace plants, was ahead 29 cents to $14.99.

Metals and minerals jumped 2.33%, as Alcan climbed 98¢ to $62.58 after the aluminum giant reported first-quarter earnings of US$86 million US, and affirmed its full-year profit forecast.

Noranda rose 71¢ to $19.50 and Inco added $1.20 to $33.20.

Oil and gas stocks gained 1.8% as Petro-Canada added $1.15 to $41 and Suncor rose $1.34 to $54.04. EnCana gained 75¢ to $46.75.

The big loser was the precious metals segment, off 1.5%. Placer Dome lost 45¢to $18.30 and Goldcorp shed 40¢ to $25.60.

Utilities also suffered as BCE lost 93¢ to $23.85.

The TSX Venture Exchange, formerly the Canadian Venture Exchange, slipped 1.35 points to 1,155.17. Trading was heavy on a volume of 42.9 million shares worth 19.8 million dollars, with 190 advances, 197 declines and 616 issues unchanged.

On Tuesday, the TSX Venture Exchange announced the appointment of Linda Hohol asits new president.

In New York, positive earnings reports from General Motors and Texas Instruments caused the Dow Jones industrial average to soar.

The Dow closed up 208 points, or 2.1%, at 10,301. The Nasdaq composite index gained 61 points, or 3.5%, to 1,815, and the S&P 500 rose 26 points, or 2.3%, to 1,128.

In U.S. economic news, industrial activity shot up last month by 0.7%, counterbalancing news that housing starts were down 7.8% in March, the biggest drop in two years.

The Canadian dollar, boosted by the Bank of Canada’s quarter-point increase in short-term interest rates, jumped US0.24¢ to US63.24¢.