Toronto stocks rallied on Tuesday as positive news from European banks cheered investors.

The S&P/TSX composite index rose 124.17 points, or 1.44%, to close at 8,720.39.

The benchmark rose 7.4% in March, its first monthly gain since August.

Nine of the 10 TSX main groups closed with gains Tuesday, led by a 3% jump by financials, followed by a 1.34% rally by the energy group.

Canadian banking shares rose after Barclays Bank declined to take part in a British government asset-protection plan and Belgian-Dutch Fortis NV outlined its future as a viable insurance group.

In Toronto, Royal Bank shares jumped to 2.7% to close at $36.78, while Toronto-Dominion Bank surged 3.5% to end the session at $43.46.

In the TSX energy sector, EnCana Corp. rose 1.2% to $51.60, while Nexen Inc. climbed 1.8% to $21.38.

The junior S&P/TSX Venture composite index gained 11.61, or 1.23%, to finish at 956.81.

The Canadian dollar edged up 0.3¢ of a cent to US79.28¢.

In New York, U.S. stocks rose, sending the S&P 500 to its best month since October 2002, as investors snapped up bank and technology shares as the first quarter came to an end.

The Dow Jones industrial average gained 86.90 points, or 1.16%, to 7,608.92. The S&P 500 added 10.34 points, or 1.31%, to 797.87. The Nasdaq composite index rose 26.79 points, or 1.78%, to 1,528.59.

The S&P 500 rose 8.5% for the month for its best one-month percentage gain since October 2002, but for the quarter the index was down 11.7%.

The Dow rose 7.73% for the month, but declined 13.3% for the quarter.

IE