March 11, 2009 / 9:23 PM / 9 years ago

REFILE-CANADA STOCKS-TSX rides gold miners to higher close

(Deletes extra word in headline)

* Index closes up 1.7 percent at 8,011.02

* Gold miners lead gains, financials also rise

* Lower oil prices hit energy shares (Adds details, comments, official numbers)

By Frank Pingue

TORONTO, March 11 (Reuters) - Toronto’s main stock index closed higher for a second straight session on Wednesday, as rising bullion prices helped lift gold-mining issues, which more than offset a weaker energy sector.

The materials group, which makes up about 20 percent of the index and is home to major gold-mining companies, rallied 5 percent to lead all other sectors and allowed the TSX to add another 130 points to Tuesday’s 300-point gain.

Shares of Barrick Gold (ABX.TO), the biggest contributor to the index’s gain, rose 6 percent to C$35.34, while Goldcorp (G.TO) followed with a jump of 5.9 percent to C$36.00.

The surge in shares of gold-mining stocks came as the price of gold bounced back above $900 an ounce, due partly to safe-haven buying as economic fears lingered.

“It really is an encouraging sign to see the markets trade higher for the second straight day because that hasn’t happened too often in recent weeks or even months,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

The S&P/TSX composite index .GSPTSE rose 130.61 points, or 1.66 percent, to close at 8,011.02. The rise followed a 4 percent gain Tuesday and marks the TSX’s first back-to-back gaining sessions in two weeks.

Financial stocks also contributed to the rally, gaining 2.2 percent on more upbeat news from the troubled U.S. banking sector, as JP Morgan Chase’s chief executive said his bank was profitable in January and February, echoing comments by Citigroup’s CEO a day earlier. [ID:nN11391731]

The rally by Toronto’s main stock index would have been even meatier had it not been for the 0.41 percent skid in the energy sector. Crude prices sagged more than 7 percent on further signs of weak global demand for crude and rising oil inventories in the United States.

The energy sector was down as much as 2 percent during the session, though it reclaimed more than half its losses. But some of the sector’s key players kept the broader index from rallying further.

“The U.S. inventory numbers that came out usually pretty much dictate the near-term fortunes for oil and energy stocks and those numbers were a little more bearish than expected,” said Picardo.

Canadian Natural Resources (CNQ.TO) fell 2 percent to C$44.89, while Talisman Energy TLM.TO slipped 1.9 percent to C$12.27.

CIBC World Markets said in a note to clients before the North American session opened that it cut its year-end forecast for the Toronto Stock Exchange’s composite index because of a weakening economic outlook.

According to CIBC, the index will finish 2009 around the 9,000-point level, down from its previous forecast of 10,000. That is still 12 percent above the latest close.

$1=$1.28 Canadian Editing by Rob Wilson

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