CANADA STOCKS-Oils, golds nudge TSX to 32-month high

Fri Mar 4, 2011 5:13pm EST
 
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 * TSX ends up 38.05 points, or 0.3 pct, at 14,252.77
 * Its energy, materials and healthcare sectors advance
 * Oil, gold prices rally
 * Inmet closes down 7.4 percent
 (Adds details, comments)
 By Claire Sibonney
 TORONTO, March 4 (Reuters) - Toronto's main stock index
reached its highest level in 32 months on Friday as intensified
fighting in Libya boosted commodity prices, supporting the
index's powerhouse energy and gold-mining shares.
 Canadian Natural Resources CNQ.TO surged 3.6 percent to
C$49.70, while Suncor Energy SU.TO jumped almost 2 percent to
C$46.39. The index's energy sector gained 1.5 percent.
 U.S. crude oil futures rose for the third day in four as
fierce fighting between loyalists to Libya's Muammar Gaddafi
and rebels seeking to oust him from power raised more fears of
supply disruptions. [O/R] [ID:nL3E7E4075]
 The market has been watching the widespread unrest in North
Africa and the Middle East for any signs that Saudi Arabia, the
leading OPEC oil producer, could be affected.
 "You see the real dichotomy between the Canadian and U.S.
markets, one more favorably impacted by commodities than the
other," said Bob Gorman, chief portfolio strategist at TD
Waterhouse, noting that there was a big selloff on U.S. stock
markets on Friday despite a solid U.S. jobs report.
 "The fear is that the increase in oil (prices) will cut
into discretionary expenditures by consumers and that will in
turn hurt all other elements of the economy," he said.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended up 38.05 points, or 0.3 percent, at 14,252.77,
its highest closing level since June 2008. It ended the week up
1.4 percent.
 In the United States, the Dow Jones industrial average
.DJI was down 88.32 points, or 0.72 percent, at 12,169.88.
Only three of the TSX's 10 main sectors advanced on Friday,
however: energy, healthcare and the materials group, home to
miners.
 Bullion rose above $1,430 an ounce, while silver surged 3
percent to a 31-year high as soaring oil prices and growing
unrest in Libya prompted investors to pile into safe havens.
 Precious metal shares gained 0.7 percent as Goldcorp G.TO
rose 1.9 percent to C$48.70, while Barrick Gold ABX.TO was up
0.6 percent at C$51.40.
 Silver Wheaton SLW.TO rallied 2.7 percent to C$43.64
after declaring its first dividend, while its quarterly profit
beat analysts' estimates, lifted by higher gold prices.
[ID:nL3E7E32KD]
 "I think the same factors are still in play," said Rick
Hutcheon, president and chief operating officer at RKH
Investments, noting the continuing influence of the unrest in
the Arab world on commodity prices and resource stocks.
 Precious metals were also supported by expectations the
U.S. Federal Reserve would hold off on monetary tightening
despite the healthy U.S. jobs data.
 U.S. employers hired workers at the fastest pace in nine
months in February and the jobless rate slipped to a nearly
two-year low of 8.9 percent, signaling the economy is finally
kicking into a higher gear. [ID:nOAT004757]
 Shares of Inmet Mining IMN.TO, which sank 7.4 percent to
C$64.00, were among the biggest losers on the Toronto Stock
Exchange, after the government of Panama announced plans to
repeal a recent law that allowed foreign-government investment
in mines. [ID:nN04106429]
  SNC-Lavalin Group SNC.TO was down 0.4 percent at
C$55.67, despite posting a higher quarterly profit and raising
its dividend on Friday, as the Libyan crisis prompted a flat
earnings outlook after at least six straight years of profit
growth. [ID:nN04158354]
 TD's Gorman said he still expects high single-digit growth
on the TSX this year, but said the market is vulnerable to a
pause from its recent extended rise.
 "We've come over the past several months a long way in a
brief period and the normal pattern is two steps forward and
one step back, so any kind of retracement here would not at all
be surprising," he said.
 The index's financial sector was 0.2 percent weaker after a
sharp gain in the previous session, while base metal miners
were down 0.8 percent, tracking a fall in copper prices.
[MET/L]
 ($1=$0.97 Canadian)
 (Additional reporting by Solarina Ho; editing by Peter
Galloway)