Toronto stocks shot up Thursday, as the market cheered the federal government’s surprise move to cut the dividend tax rate and remove the fog of uncertainty surrounding the income trust sector.

The S&P/TSX composite index added 162.02 points, or 1.48%, to close 11,081.82.

Volume on the senior exchange was 254 million shares.

U.S. markets were closed for the Thanksgiving holiday.

Ottawa announced late Wednesday it would cut taxes on dividends and resume providing advance tax rulings on pending trust conversions, making it easier for companies that want to convert to trusts.

Before the announcement, the government had indicated it would be conducting a review of the trust sector, causing uncertainty in the market.

Nine of the 10 TSX main sub-groups were up in today’s session, with the financials group gaining 2.69%.

CI Fund Management, which had indicated it was interested in converting to a trust, moved up $1.92, or 8.21%, to $25.30 in the wake of Ottawa’s announcement.

Royal Bank of Canada gained $3.10, or 3.53%, to $90.90.

The energy sector moved up 0.62%. Enbridge gained $2.18, or 5.95%, to $38.82.

The telecommunications sector was the biggest gainer on the day, advancing 2.92%.

BCE Inc. gained $1.80, or 6.45%, to $29.70.

Telus Corp. announced a merger of Telus Mobility with its wireline division. Telus gained $1.92, or 4.21%, to $47.55.

The information technology sector, off 0.87%, was the only declining group on the session. Nortel Networks lost 9¢, or 2.50%, to $3.51.

The Canadian dollar edged up 0.02 of a cent to US85.34¢.

The junior S&P/TSX venture exchange finished up 12.88, or 0.63%, to 2,066.91.