May 4, 2009 / 3:14 PM / 8 years ago

CANADA STOCKS-Resources push TSX to highest since Nov. 10

3 Min Read

* TSX hits 9,721.38, highest since Nov 10

* Materials, oil groups lead advance (Adds details)

By Ka Yan Ng

TORONTO, May 4 (Reuters) - Toronto's main stock index jumped more than 2 percent on Monday to hit its highest level in nearly six months on strength in resources and financials, the biggest components of the index.

Resource-based issues advanced as the price of oil neared $54 a barrel and gold rallied above $900 an ounce. The materials group gained 3.9 percent, while the oil and gas group rose 2.1 percent. [ID:nnSP475488] [ID:nSP468176]

Key gainers among both sectors included top advancer fertilizer company Potash Corp of Saskatchewan (POT.TO), which rose 5.6 percent to C$112.80. Energy giant EnCana (ECA.TO) rose 2.7 percent to C$58.54.

Gold companies Barrick Gold (ABX.TO) rose 2.7 percent to C$35.31, while Goldcorp (G.TO) climbed 3.5 percent to C$33.74.

"We're seeing lighter trading so far today, though Toronto is being pushed higher due to materials and gold. Financials are doing pretty good too," said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

At 10:40 a.m. (1440 GMT), the S&P/TSX composite index .GSPTSE was up 191.04 points, or 2.01 percent, to 9,688.00. Earlier it hit 9,721.38, its highest level since Nov. 10.

Nine of the TSX's 10 main groups were higher.

Financials rose 1.62 percent as the sector took cues from U.S. banks, which were rising on hopes that they will be able to raise any capital they may need as a result of findings in the government stress tests to be released this week. RBC Capital Markets also upgraded several Canadian banks. [ID:nWNAB2477]

A further boost to the overall index was U.S. data that showed construction spending rose in March, and that pending home sales increased more than anticipated. There was no Canadian data on tap on Monday. [ID:nN04391087]

Research in Motion RIM.TO was also a big mover, rising 2.4 percent to C$87.86, as the BlackBerry maker said it has formed an alliance with Hewlett-Packard Co (HPQ.N) to provide services for the BlackBerry. [ID:nBNG178360]

The TSX slipped 0.5 percent last week, following seven straight weeks of gains that have carried it up more than 25 percent since early March.

Partly because of this massive gain, Ibel said he expects the index to retreat as the upcoming U.S. bank stress tests, monthly employment data, and the health of the overall economy are still among the few "major hurdles" to overcome.

"I'm still expecting a pullback...based on the seasonality, the time of year, and based upon the fact that the past seven weeks or so, we've had one of the largest runups in the history of the market. Those two factors are leading me to believe that we'll probably have a slight retest at the bottom." (Editing by Jeffrey Hodgson)

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