UPDATE 2-Toronto stock index rebounds as oil price rises

Fri Oct 17, 2008 1:01pm EDT
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* Battered energy sector gains as oil recovers

* Materials sector turns positive, but gold drags

* Index rebounds from 200-point loss (Updates to prices to midday, adds quotes)

TORONTO, Oct 17 (Reuters) - The Toronto Stock Exchange's main index was up more than 3 percent at midday on Friday, reversing its steep drop just after the open, with energy issues leading the charge on the recovering price of oil.

The energy group, which has been under pressure most of the week, gained 6.1 percent as oil rose from a 16-month low to about $72 a barrel. [ID:nN16417066]

Oil prices are off more than 50 percent from the high above $147 a barrel they hit just three months ago, and the energy group has trended lower alongside them.

Husky Energy HSE.TO was up 9.5 percent at C$32.51, while EnCana ECA.TO gained 6 percent to C$49.28.

Shortly after 12:25 noon. (1630 GMT), the S&P/TSX composite index .GSPTSE was up 302.58 points, or 3.3 percent, at 9,572.55. All 10 of the index's main groups were higher.

The index fell 200 points at the open as falling gold prices and recession worries stemming from the credit crisis took hold once again. But it climbed steadily as the market's focus moved to oil prices and bargain-hunting.   Continued...