UPDATE 2-Toronto stocks gain as oil shares rise

Thu Oct 9, 2008 12:34pm EDT
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* Energy sector gains, had been down all week

* Gold subindex retreats after two-day rally

(Adds analyst comment and details)

TORONTO, Oct 9 (Reuters) - The Toronto Stock Exchange's main index was higher at midday on Thursday after see-sawing throughout the morning on erratic swings in the energy group as the price of oil declined and investors mulled how much the credit crisis would hurt the global economy.

The energy sector initially led the rally, bouncing from sharp losses all week. Those strong gains were cut in half as oil fell towards $86, pressured by expectations that demand will fall sharply if the credit crisis pushes the global economy into recession. [ID:nSP359316]

EnCana ECA.TO was up 1.5 percent to $52.99, while Nexen NXY.TO was up 1.4 percent at C$17.20, both halving early gains.

The index had popped more than 300 points higher right after the open but the rally fizzled and then again reversed course. Wild swings on the index have been a regular occurrence recently as concerns about the credit crunch gained momentum.

Shortly after 11:45 a.m. (1545 GMT), the S&P/TSX composite index .GSPTSE was up 114.56 points, or 1,14 percent, at 10,170.87. Eight of 10 sectors were in positive territory.

"I don't think it necessarily says we're out of the woods as far as the market as a whole, but it's what I would call a relief rally," said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.   Continued...