Stock markets in Canada and the U.S. surged sharply higher on Monday as investors reacted to news of a major Canadian oil sands deal and details of a U.S. government plan to buy up toxic banking assets.

The S&P/TSX composite index soared 452.16 points, or 5.3%, to close at 8,958.51.

Financial stocks jumped 8.9% as investors took in long-awaited details of the U.S. Treasury Department’s plan to relieve banks of toxic assets.

On the TSX, shares of Manulife Financial Corp. rallied $2.22, or 15.8%, to close at $16.26 and National Bank of Canada’s shares rose 10.2% to $45.18.

Toronto-Dominion Bank’s stock surged 10.3% to $45.50 and Sun Life Financial Corp. gained 15% to $23.86.

Other gainers included Royal Bank of Canada, up 7.6% to $37.94 and CIBC, higher by 8.3% to $48.00.

The energy group also advanced sharply on Monday, surging 7.4% as oil futures jumped. Crude for May delivery rose US$1.73, or 3.3%, to close at US$53.80 a barrel on the New York Mercantile Exchange.

Shares of Petro-Canada soared more than 20% after news that the company would be bought by Suncor Energy Inc. Petro-Canada shares rose $6.05 to close at $35.70.

Shares of Suncor dipped $0.16, or 0.5%, to $30.74 on the news of the acquisition.

Other energy group gainers included Canadian Natural Resources Ltd., up 8.8% to $52.96, and EnCana Corp, higher by 8.1% to $55.50.

Nexen Inc.’s stock surged $1.90, or 9.9%, to $21.15.

The sub-gold index retreated 1.1% on Monday as gold futures slipped lower. Gold for April delivery lost US$3.70, or 0.4%, to end at US$952.50 an ounce on the Comex division of the New York Mercantile Exchange.

In the materials group, which advanced 1.3%, shares of Potash Corp. rose 6.6% to $101.32.

Agrium Inc. shares gained 5.3% to $47.27 and Inmet Mining Corp. rose 5.5% to $35.50.

Lower for the day was Barrick Gold Corp., down 2% to $40.54.

The S&P/TSX Venture composite added 22.23 points, or 2.5%, to close at 924.03.

The loonie gained more than a cent against the greenback, to close at US81.80¢.

Equities south of the border experienced an even sharper rally on the news of the Treasury plan on Monday.

The Dow Jones industrial average jumped 497.48 points, or 6.8%, to 7,775.86. The advance marked the Dow’s fifth biggest point gain in its history and fourth biggest since December 31, 2007.

The S&P 500 index added 54.38 points, or 7.1%, to stand at 822.92.

The Nasdaq composite index rose 98.5 points, or 6.8%, to close at 1,555.77.

IE