CANADA STOCKS-TSX gets lift from oil and China hopes

Wed Mar 4, 2009 4:24pm EST
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* Key Toronto index closes 2.4 percent higher

* Energy shares surge 6.59 percent to lead TSX rally

* TSX rally comes on heels of steep Tuesday skid (Adds comments, details and official numbers)

By Frank Pingue

TORONTO, March 4 (Reuters) - Toronto's main stock index closed higher on Wednesday as talk of new stimulus measures in China lifted oil prices and lit a fire under energy shares.

The 2.4 percent rally gave the index its first higher close in four sessions and allowed it to reclaim the value it lost when it tumbled to its lowest level since Oct. 2003 on Tuesday.

Shares of EnCana Corp ECA.TO, Canada's biggest energy company, headlined the index's gain as its shares rose 6.1 percent to C$50.27, followed by Suncor Energy SU.TO, which closed 7.9 percent higher at C$26.99.

The surge in energy shares came alongside a rally in the price of oil, a key Canadian export, after manufacturing data from China, the world's No. 2 oil consumer, sparked hope of an economic recovery there. An unexpected drop in U.S. crude stocks also helped support the surge in oil prices.

Talk that China would increase spending in areas such as infrastructure and manufacturing, on top of a $585 billion stimulus package unveiled in November, also helped Toronto's resource-heavy index. [ID:nBJC000263]   Continued...