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TORONTO (Reuters) - Canada's main stock index jumped more than 1 percent to its highest level in more than two months on Tuesday as rallying oil prices benefited from a weaker U.S. dollar, sending energy shares higher.
After slumping to multiyear lows in recent months over concerns about oversupply, the price of oil began bouncing back late last week on hopes that oil production might fall.
Oil prices were up about 5 percent on Tuesday, taking their gains in the last four sessions to 19 percent. Some investors were betting that the oil price might have found a bottom.
Investors were also encouraged by data showing that growth in the U.S. manufacturing sector held steady in January.
The benchmark TSX index was up for a fourth-straight day and has advanced about 3 percent year-to-date.
“There’s a bit of euphoria right now,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
“These ups and downs are going to continue for months to come,” he added. “But for people to think that it’s going to be only onward and upward from here, that might be a little too optimistic.”
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 162.30 points, or 1.09 percent, at 15,062.77.
In the energy sector, which was up 4.2 percent, Canadian Natural Resources Ltd (CNQ.TO) added 1.8 percent to C$39.58 and Penn West Petroleum PWT.TO jumped 22.9 percent to C$2.63.
Canadian Oil Sands Ltd COS.TO rose 20.5 percent to C$11.39, adding to gains of 20.4 percent and 20.6 percent in the previous two sessions, respectively. Investors have been cheering aggressive moves by the company in response to the drop in oil prices.
Editing by Jonathan Oatis