CANADA STOCKS-TSX nears 2-month high as energy shares rally

Tue Jan 6, 2009 10:07am EST
 
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* Toronto index hits highest level since Nov. 12

* Higher oil prices credited with market rise

* TSX higher for sixth straight session (Adds details and comments)

By Frank Pingue

TORONTO, Jan 6 (Reuters) - Toronto's main stock index shot to its highest level in nearly two months on Tuesday as oil prices rose to a one-month high and helped the resource heavy index add to a recent string of gains.

The index's heavyweight energy sector led with a gain of 3 percent as Israel's incursion into Gaza, coupled with a dispute between Russia and Ukraine over natural gas, heightened concern about supply disruptions and lifted the price of oil to over $50 a barrel.

"Obviously there is support from the commodities," said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc. "(Up) through 50 bucks on oil, and continued conflict in the Middle East will do that."

At 9:55 a.m. (1455 GMT), the S&P/TSX composite index .GSPTSE was up 112.57 points, or 1.21 percent, at 9,398.08, with seven of its 10 sectors in positive territory.

Earlier, the market had rallied to 9,412.75, its highest level since Nov. 12.

Suncor Energy (SU.TO: Quote) shares, up 8.5 percent at C$29.75, were a key contributor to the market's gain, while shares of Canadian Natural Resources (CNQ.TO: Quote) rose 3 percent to C$56.82.

($1=$1.18 Canadian) (Reporting by Frank Pingue; editing by Peter Galloway)