CANADA STOCKS-TSX rises 2.8 pct as energy shares rally

Wed Dec 10, 2008 5:14pm EST
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* Higher commodity prices help propel rally

* Concern about U.S. auto bailout weighs on financials

* Toronto market has advanced in 3 of last 4 sessions (Adds details and comments)

By Frank Pingue

TORONTO, Dec 10 (Reuters) - Toronto's main stock index ended higher on Wednesday as signs of reduced oil supplies sparked a rally in energy shares, but financials capped the gains as they tumbled on economic worries and concerns about the fate of a bailout for U.S. automakers.

Oil prices increased 3 percent as Saudi Arabia told major customers it was reducing supplies substantially next month in a move that could bring the kingdom's output below its implied OPEC target. That helped the energy sector rally 5.9 percent.

But nagging concerns about Canada's economy, coupled with uncertainty over the fate of a rescue plan for U.S. automakers -- which bogged down Wednesday in political wrangling in Washington -- sent another chill through financials, which make up about a third of the broader TSX index.

The S&P/TSX composite index .GSPTSE jumped 236.44 points, or 2.82 percent, to 8,634.00, with six of its 10 main sectors ending higher.

The index is now up 6.4 percent this week after sagging 12.4 percent last week.   Continued...