CANADA STOCKS-TSX rides oil and China hopes to higher close

Wed Mar 4, 2009 4:57pm EST
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* TSX closes 2.4 percent higher at 7,814.75

* Ends three-session losing skid

* Energy shares surge 6.59 percent to lead rally (Adds comments, details)

By Frank Pingue

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

The 2.4 percent rally ended a three-day losing streak, and allowed the TSX to reclaim some value lost when it skidded to its lowest level since October 2003 on Tuesday.

Shares of EnCana Corp ECA.TO, Canada's biggest energy company, headlined gains, rising 6.1 percent to C$50.27. Suncor Energy SU.TO closed 7.9 percent higher at C$26.99.

The surge by energy issues matched a rally in the price of oil, a key Canadian export, after manufacturing data from China, the world's No. 2 oil consumer, sparked hopes for an economic recovery there. An unexpected drop in U.S. crude stocks also helped support the higher 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...