TORONTO, Jan 14 (Reuters) - Toronto’s main stock market index jumped more than 100 points at the open on Monday, before pulling back, as record gold prices and firm energy issues underpinned the resource-heavy bourse.
But traders and analysts wondered whether the volatile index, which slipped 1.1 percent last week in its first full week of trading in the new year, could sustain its early momentum.
“We’ve had a pretty rugged start to the year and it’s probably reasonably oversold, so one of these days we’ll catch a rally that follows through for at least a couple of days, so we’ll see if it’s today,” said Paul Hand, managing director at RBS Capital Markets.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 62.41 points, or 0.5 percent, at 13,694.98 after climbing as high as 13,734.38 earlier in the day.
Only five of the TSX index’s 10 main groups were higher but a 1.9 percent boost from the materials group and a 0.6 percent rise among energy shares propped up the market.
The gold subgroup, home to some of the biggest gold producers in the world, was up 2.4 percent.
Gold companies showed early leadership as the price for the precious metal climbed to a record high above $910 an ounce on weakness in the U.S. dollar and expectations of a cut in U.S. interest rates.
Base metal prices, including copper and nickel, were also firmer adding more shine to the materials group.
Yamana Gold (YRI.TO) added 92 Canadian cents to C$17.67. Mid-tier miner Yamana said on Monday it expects to produce up to 1.3 million gold equivalent ounces in 2008, and 23 percent more than that in 2009.
Yamana, which bought Meridian Gold last year, said its gold production in 2007 was about 773,000 ounces.
Agrium said it has withdrawn its pre-merger notification related to UAP Holding Corp UAPH.O, and will refile it within the next 30 days to give the Federal Trade Commission more time to review the proposed acquisition.
The financial, consumer discretionary and telecommunications sectors were lower.
Thomson Corp TOC.TO was off C$1.02 at C$36.35. Reuters Group Plc RTR.L and Thomson said they expect Thomson’s proposed acquisition of Reuters to close early in the second quarter. ($1=$1.02 Canadian) (Reporting by Scott Anderson; Editing by Bernadette Baum)