* TSX gains 1.65 percent to 10,540.71
* Optimism about economic recovery fuels gains
* Energy and materials lead the way (Adds details, quotes)
By John McCrank
TORONTO, July 20 (Reuters) - Toronto’s main stock index rose 1.65 percent on Monday for its sixth-straight winning session as optimism that the worst of the global recession has past sparked a broad rally, with energy and other commodity stocks leading the way.
Three of the biggest heavyweight gainers on the index were from the energy patch with oil companies rising as the price of U.S. crude CLc1 settled up 42 cents at $63.98 a barrel. Crude pushed up more than 6 percent last week. [ID:nSYD403861]
“There has been increasing optimism that the global economy is in turnaround mode here, every data point that comes out seems to confirm that viewpoint,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.
“If the global economy turns around, commodities and energy will be big beneficiaries of that.”
The S&P/TSX composite index .GSPTSE closed up 171.29 points at 10,540.71. Nine of the TSX’s 10 main groups were higher, with the energy group up 2.37 percent and the mining-heavy materials sector up 2.34 percent.
In the mining group, shares of First Quantum Minerals FM.TO ended up 11.25 percent at C$69.64, after the company said its second-quarter copper production rose 14 percent from year-earlier levels. [ID:nN2074884]
In the health care sector, shares of Labopharm Inc DDS.TO slumped 24 Canadian cents, or 10 percent, to C$2.14 after the U.S. Food and Drug Administration denied approval of its once-daily depression treatment Trazodone, citing deficiencies at a manufacturing facility. [ID:nN2066779]
The index’s heavily weighted financial group, which rose 1.29 percent, was given a boost by a strong performance from financial companies in the United States, said Bruce Latimer, trader at Dundee Securities.
U.S. investors cheered a $3 billion lifeline for struggling lender CIT Group Inc from its bondholders. [ID:nN206604]
“I think (CIT) getting the financing at least gives you the feeling that they’re not going to go completely under,” Latimer said.
Canadian earnings season kicks off in earnest this week.
Canadian National Railway (CNR.TO) reported its second-quarter results after market close on Monday, with earnings of 82 Canadian cents a share, compared with 95 Canadian cents a year earlier. Analysts had expected EPS of 75 Canadian cents. [ID:nN17496790]
“We haven’t seen too many earnings reports from the Canadian bellwethers, but this week you’ve got a number of big names coming out with earnings on the Canadian side, so I think the expectation is that the Canadian companies should also be able to at least meet if not exceed estimates,” Picardo said.
$1=$1.11 Canadian Reporting by John McCrank; editing by Peter Galloway