Unlike the reaction to three previous U.S. rate increases this year, yesterday's hikes were cheered on the Toronto Stock Exchange and in money markets, where stock and bond prices climbed and the Canadian dollar rallied late in the day against its U.S. counterpart.

The TSE's 300 index soared 60.87 points to 4269.15, with advancing issues leading declines 419 to 316. The Canadian dollar lost 0.08 of a cent, and closed yesterday at 72.66 (U.S.) cents.

Many major U.S. banks wasted little time in hiking their prime lending rate to 7.25 per cent from 6.75 per cent, which means the U.S. prime - the benchmark for consumer and business loans - is now higher than Canada's.