Energy leads TSX higher as U.S. data fuels optimism
By John Tilak
TORONTO (Reuters) - Canada's main stock index closed stronger on Friday, led by energy and materials shares, which benefited from a rise in commodity prices after positive U.S. economic data.
U.S. non-farm payroll jobs rose in January and gains in the prior two months were bigger than initially reported, supporting views the economy's sluggish recovery was on track despite a surprise contraction in output in the final three months of 2012. <MKTS/GLOB>
Another report showed factory activity in Canada's largest export market rose last month, reaching the highest level since April.
"Investors are assuming that U.S. and global GDP growth will surprise on the upside down the road," said Sid Mokhtari, market technician and director, institutional equity research, CIBC World Markets.
The analyst noted investors in general are turning more positive on equity markets, shifting to stocks from bonds, a phenomenon some have dubbed "the great rotation".
"There is some vitality to underlying economic trends. We seem to be getting back on track," said Fred Ketchen, director of equity trading at ScotiaMcLeod. "The employment reports have not been blockbusters, but they are better than some estimates."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 83.59 points, or 0.66 percent, at 12,768.83. Nine of the 10 main sectors on the index were trading higher.
Energy shares rose 0.9 percent, tracking higher oil prices. Brent crude climbed above $116 to hit a four-month high on economic optimism. <O/R> Continued...