February 17, 2011 / 10:54 PM / in 7 years

CANADA STOCKS-Oils help TSX extend rally to 2-1/2 yr highs

   * TSX up 76.97 points, or 0.55 percent, at 14,136.15
 * Six of the 10 main groups finish higher
 * Energy stocks up 1.31 percent  (Adds details, comments)
 By Solarina Ho
 TORONTO, Feb 17 (Reuters) - Toronto’s main stock index closed higher on Thursday, extending its recent rally to levels not seen since early July 2008, as rising U.S. crude futures provided support for energy issues.
 Suncor Energy (SU.TO) led the charge, rising 2.37 percent to C$44.48, while fellow oil company Canadian Natural Resources (CNQ.TO) rose 1.46 percent to C$47.23.
 The energy group gained 1.31 percent, rising with U.S. crude futures, as political unrest in the Middle East kept concerns over supply disruptions in focus. [O/R]
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 76.97 points, or 0.55 percent, at 14,136.15.
 “It’s the second day that we’re closing over 14,000 in the last 2-1/2 years. The strength of the TSX has certainly been quite remarkable,” said Elvis Picardo, analyst and strategist at Global Securities.
 “I’d hate to go against the trend, but there does seem to be a great deal of bullishness out there. That in itself should be a cause for some concern. It’s not like the (traffic) signal is flashing red, but certainly yellow would be an appropriate sort of metaphor.”
 Six of the index’s 10 main groups finished higher.
 Heavyweight financial stocks, which make up nearly 30 percent of the index, rose 0.57 percent as most of the big banks advanced. Bank of Nova Scotia (BNS.TO) led with a 1.3 percent climb to C$60.99.
 “They’re reflecting expectations for their fourth-quarter numbers,” said Rick Hutcheon, president and chief operating officer of RKH Investments. “Canadian banks are pretty solid, they just keep on chugging along, so I‘m not too worried.”
 The group’s gains were held back by a 2.62 percent drop by Sun Life Financial (SLF.TO) to C$33.02. Canada’s No. 3 insurer reported earnings that missed analysts’ expectations after the market closed on Wednesday.[ID:nN16243387] [ID:nN17157970]
 Diversified miner Teck Resources TCKb.TO was among the day’s biggest decliners, falling 2.87 percent to C$55.87 as copper fell from record highs to a three-week low on inflation worries and as demand-crimping prices cooled sentiment. [MET/L]
 “There’s some tendency for investors to take profits on some of these big names that have done extremely well in recent months,” Picardo said.
 “There’s a little bit of skittishness about where commodity prices will go from here, so I think that could be the normal course of profit-taking.”
 Agnico Eagle (AEM.TO) shed 4.85 percent to C$71.73 and Kinross Gold (K.TO) dropped 2.33 percent to C$16.37 after both gold miners reported lower than expected quarterly earnings late on Wednesday. [ID:nN16257028]
 Barrick Gold (ABX.TO), which posted a better than expected quarterly profit, was another key gainer, rising 1.9 percent to C$49.91. [ID:nN17277324]
 The broader materials group, home to miners, was flat, closing down just 0.01 percent.
 Michael Sprung, president of Sprung & Co Investment Counsel was cautious about the market’s recent rally.
 “Market sentiment can certainly keep this going for a while, but despite all this enthusiasm, the market is still a little bit ahead of where the underlying economic fundamentals would place it at this point in time. So our view is we wouldn’t be surprised to see a correction sometime in the next few months,” he said.
 ($1=$0.98 Canadian)  (Reporting by Solarina Ho; editing by Peter Galloway)                                        

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