Energy shares lift TSX onto firmer ground

Thu Apr 26, 2012 4:43pm EDT
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By Claire Sibonney

TORONTO (Reuters) - Toronto's main stock index ended moderately higher on Thursday as stronger energy prices lifted oil and natural gas companies, though gains were capped by weak materials shares, hit by disappointing earnings.

The powerhouse energy sector climbed 1.5 percent, despite the first stream of earnings in the group mostly missing expectations.

Encana Corp (ECA.TO: Quote) advanced nearly 6 percent to C$19.44 a day after reporting a rise in first-quarter profits. It benefited from its hedging program as gas prices slumped to 10-year lows, while its price target was upgraded on Thursday.

MEG Energy (MEG.TO: Quote), a Canadian oil sands developer, surged 8.6 percent to C$41.97 after reporting an 18 percent rise in first-quarter profits on lower costs and higher price realizations.

"You have oil up ... natural gas has popped 10 percent in the past week or so, so outside influences are more of an impact than the specific company reports unless in the case of Potash Corp for instance where it's a significant miss," said Levente Mady, market strategist at Union Securities, in Vancouver.

Potash Corp of Saskatchewan (POT.TO: Quote), the world's largest fertilizer maker, was in fact one of the heaviest decliners on the index. It dropped 3.2 percent to C$42.25 after reporting a 33 percent profit drop due to lower sales and production, which in turn led to higher costs.

Goldcorp (G.TO: Quote), which reported late on Wednesday, led the key names on the downside.

Canada's No.2 gold miner plunged 6 percent to C$38.05 after announced a slim increase in operating profit as its most prolific mine was hit by operational problems that reduced output and offset most of the gains from a surge in bullion prices.   Continued...

People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch