UPDATE 2-Investor optimism boosts Toronto stocks 1.3 pct

Mon Apr 7, 2008 10:47am EDT
 
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(Adds details, comments, updates trading)

TORONTO, April 7 (Reuters) - Toronto's main stock market index raced higher on Monday as investors started the week in a positive mood and firm commodity prices underpinned the market.

By mid-morning the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 171.36 points, or 1.3 percent, at 13,839.55, off an earlier high of 13,873.44.

Nine of the TSX index's 10 main groups rose, led by a 2.6 percent boost in the resource-heavy materials group and a 2.1 percent rise in the influential energy sector. Financial shares, which make up about 30 percent of the index, were up 0.4 percent.

The key index gained 117 points on Friday for a total rise of 3.3 percent in all of last week.

"We're seeing some of the longer-term investors beginning to pick away at some of the stocks that have been depressed and until the next round of headlines hits, this will probably continue," said Michael Sprung, president at Sprung and Co Investment Counsel.

"We're seeing gold, copper and oil all up and even the financials have been acting better and that should all be good news for the Canadian market."

Materials shares rode the coattails of a rise in the price of gold by more than 1 percent to $925.60 an ounce. Firm oil prices and the positive market sentiment prompted investors to move into gold, traditionally seen as a hedge against inflation.

Goldcorp (G.TO: Quote) added 79 Canadian cents to C$41.59 and Barrick Gold Corp (ABX.TO: Quote), the world's biggest producer, gained C$1.04 Canadian cents to C$45.13.   Continued...