January 28, 2016 / 10:00 PM / 2 years ago

CANADA STOCKS-TSX jumps nearly 2 percent as energy stocks surge

3 Min Read

(Adds portfolio manager comment, updates prices to close)

* TSX ends up 214.16 points, or 1.73 percent, at 12,591.93

* Seven of the TSX's 10 main groups rise

By Alastair Sharp

TORONTO, Jan 28 (Reuters) - Canada's main stock index made sharp gains on Thursday, with energy stocks riding an oil price rally tied to hopes for a deal to clear a global glut, while shares of Bombardier Inc fell further into territory that risks expulsion from the index.

The energy sector climbed 5.3 percent as oil surged as much as 8 percent to above $35 per barrel, rebounding from a 12-year low set this month.

Financial stocks added 2.5 percent, as the jump in crude helped alleviate some concern among investors about bank exposure to bad loans in Canada's oil patch.

Crude prices pared some gains, however, as analysts and market watchers expressed skepticism that a deal among oil-producing countries would be struck, particularly as Iran, which has boosted oil exports after the lifting of sanctions, seeks to recover market share.

"I'm not a hundred percent certain that this is the all-clear yet, that this is the bottom" for oil prices and oil equities, said Manash Goswami, a portfolio manager at First Asset Investment Management. "It's not all rosy out there."

The most influential movers on the index included Canadian Natural Resources, which jumped 5.4 percent to C$29.18, and Suncor Energy Inc, which gained 4.5 percent to C$32.83. Pipeline operator Enbridge Inc advanced 2.3 percent to C$46.45.

The Toronto Stock Exchange's S&P/TSX composite index ended up 214.16 points, or 1.73 percent, at 12,591.93.

It was its third straight day of gains after hitting its lowest since August 2012 on Jan. 20.

Advancers outnumbered decliners by more than 2 to 1, and seven of the index's 10 main groups were in positive territory.

Bombardier fell 10.1 percent to C$0.89, as some funds dumped its shares on fears the train and plane maker could be ejected from Canada's main index.

The industrials sector to which Bombardier belongs jumped 2.1 percent.

Contract electronics manufacturer Celestica Inc fell 15.7 percent to C$11.68 after posting an earnings miss and giving a dire outlook after the bell on Wednesday.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.9 percent.

Copper prices fell 1.3 percent to $4,530 a tonne, while gold futures slipped 0.2 percent to $1,114 an ounce. (Reporting by Alastair Sharp Editing by W Simon and James Dalgleish)

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