UPDATE 3-Resource shares lead rally by Toronto stocks

Thu Dec 6, 2007 4:46pm EST
 
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(Updates official closing numbers, adds detail)

TORONTO Dec 6 (Reuters) - The Toronto Stock Exchange's main index finished strongly higher on Thursday, as robust resource issues benefited from higher commodity prices and led a broad afternoon rally.

The materials sector led the charge, helped by a rally in gold prices and a surge in units of Fording Canadian Coal Trust FDG_u.TO after it said it was weighing its options, including the sale of the company.

The coal producer jumped C$4.65, or 13.5 percent, to C$39.10, making it the biggest net advancer by weight. Teck Cominco TCKb.TO, which has a nearly 20 percent stake in Fording, rose C$1.61, or 4.4 percent, to C$38.11. The sector as a whole was up 2.4 percent.

The energy sector was up 1.7 percent while the price of oil climbed $2.74 to $90.23 a barrel on supply concerns and weakness in the U.S. dollar.

Canadian Natural Resources (CNQ.TO: Quote) rose C$1.60, or 2.4 percent, to C$68.09 and Husky Energy (HSE.TO: Quote) gained 81 Canadian cents, or 2 percent, to C$42.10, the day after it said it would form a joint venture with British oil major BP Plc (BP.L: Quote).

The S&P/TSX composite index .GSPTSE closed up 115.26 points, or 0.84 percent, at 13,849.80.

Stocks also got some support as U.S. President George W. Bush outlined a plan to freeze interest-rate increases on adjustable-rate subprime mortgages for five years.

But the financial sector remained the lone group in negative territory, hurt by Canadian Imperial Bank of Commerce's (CM.TO: Quote) decline after the bank said its hedged exposure to the subprime market could result in significant losses.

CIBC fell C$4.69, or 5.4 percent, to C$82.40. Bank of Nova Scotia BNS.TO rose 21 Canadian cents, or 0.4 percent, to C$52.36 after it reported an increase in fourth-quarter earnings but gave a cautious outlook for next year.

($1=$1.01 Canadian) (Reporting by Leah Schnurr; Editing by Rob Wilson)