Markets are finally managing to hold the gains foretold by Friday’s pre-market trading. At midday, the S&P/TSX index is up 53 points to 7,127.

Volume is stronger than expected before the first long weekend of the summer at 83.3 million shares. The up volume is trumping the down by more than two to one, and market breadth is also positive. Winners are beating losers by a nine to eight margin.

Strong GDP numbers in Canada boosted sentiment about the strength of the Canadian recovery, notwithstanding some mixed numbers in the United States The rally is a broad-based bargain hunters’ delight today.

Tech stocks, as the hardest hit, are leading the rally with a 3.7% gain. Telecoms are gaining, as are industrials, consumer stocks, real estate and financials. The only loser is golds, dropping 2%, as some of the flight to quality move unwinds itself.

BCE is a big trade today, gaining 3.6% on 1.6 million shares after it unveiled plans to buyback SBC Communications Inc.’s 20% interest in Bell Canada for $6.32 billion. Under the terms of the agreement, the initial payment will be $1.33 billion, made today. SBC will acquire, by way of private placement, $250 million of BCE common equity on July 15. BCE will exercise its right to purchase the remaining approximately 16% valued at $4.99 billion, by Jan. 3, 2003.

Apart from the BCE trade, there’s also strength in names such as Nortel Networks, which is up 9.4% on huge volume of 19.9 million shares. It is joined in the rebound by strong gains in Telus, Zarlink, Cognos, Hummingbird, Geac and Ballard Power.

Blue chip stocks are also recovering, with gains in EnCana, Alcan, Tembec and Sears Canada. Alcan is getting a boost after it reaffirmed that second quarter operating earnings are expected to be at the upper end of its previously disclosed guidance of US35¢ to US45¢ per common share.

The banks are another locus of strength, with CIBC up about 2% and TD and Scotia both up 1%. Royal Bank is down a little.

The golds are weaker at midday, with Barrick down 2.3% as gold falls below US$320 an ounce in London. Kinross, TVX Gold, Bema Gold, Placer Dome, and Echo Bay Mines are all down sharply.

Other losers include Shell Canada, Gildan Activewear, Rogers and Enbridge.

In New York, bargain hunting has been the order of the day there. The Dow Jones industrial average is up 52 points at midday to 9,322. The S&P 500 has added eight points to 999. The Nasdaq composite index has gained 20 ticks to 1,479.

The small caps are not joining the fun today, as weakness in golds is taking its toll. The S&P/TSX Venture index is down seven points at midday to 1152. Volume is on the weak side there too, with 13.3 million shares changing hands. American Bonanza Gold remains the top trader, dropping 2¢ to 18¢ on 644,000 shares.