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By Leah Schnurr
TORONTO, Feb 20 (Reuters) - The Toronto Stock Exchange's main index charged higher on Wednesday, shrugging off early losses, as resource shares were boosted by new highs from oil and gold prices.
It was the second consecutive day of triple-digit gains for the index, adding onto the previous session's more than 200-point advance, which was also fueled by oil's return to the $100 mark. The index is up 3 percent for the month so far.
The energy and materials sectors, which combined make up about 40 percent of the index, gained 0.9 percent and 1.2 percent respectively.
Oil hurtled to a record $101.31 a barrel, spurred by concerns over supply from OPEC. Crude closed at $100.74, the top settlement on record.
Gold prices followed oil's momentum to hit a high of $943.20 an ounce before stepping back to $934.80. The gold-producers subindex rose 1.2 percent, with Centerra Gold (CG.TO) gaining 29 Canadian cents, or 2.1 percent, to C$14.04. Also in the resources area, Agrium Inc (AGU.TO) climbed C$2.43, or 3.5 percent, to C$71.43.
"It looks like we had a nice follow-through," said John Kinsey, portfolio manager at Caldwell Securities Ltd. "The commodities have been helping us along with oil making new highs and gold making new highs."
The S&P/TSX composite index .GSPTSE closed up 103.95 points, or 0.77 percent, at 13,551.69 with seven of its 10 main groups in positive territory.
The index retreated 100 points early in the session on weaker commodity prices and stronger than expected inflation data in the United States.
The U.S. consumer price index was up 0.4 percent in January for a second straight month, suggesting persistent inflation and stoking worries the Federal Reserve will not be able to cut interest rates much more.
But minutes from the Fed's last policy-setting meeting released in the afternoon helped re-energize hopes of more cuts.
"We got a little rattled out of the gate this morning by the inflation numbers, but I think when it's all said and done, it's not going to mean very much and the Fed will still go ahead and cut rates because they have to," said Rick Hutcheon, president and chief operating officer at RKH Investments.
Elsewhere, Canadian Pacific Railway Ltd (CP.TO)(CP.N) also helped pull the index higher after it said it will appeal a grain rate ruling by the Canadian Transportation Agency that could take a bite out of its earnings for 2008.
CP rose C$1.57, or 2.2 percent, to C$73.26. Canadian National Railway Co (CNR.TO), which also said it will appeal the decision, was up 68 Canadian cents, or 1.3 percent, at C$53.15.
Shares of TransAlta Corp (TA.TO) added 76 Canadian cents, or 2.2 percent, to C$35.41 after it said it has sold its Mexican power plants for $303.5 million.
On the downside, home improvement retailer Rona Inc RON.TO was among the biggest drags on the benchmark, shedding 94 Canadian cents, or 5.8 percent, to C$15.41 after reporting a drop in profit.
Market volume was 387 million shares worth C$6.7 billion. Advancers outpaced decliners 902 to 743. The blue chip S&P/TSX 60 index .TSE60 closed up 7.89 points, or 1 percent, at 795.51.
In New York, stocks also rallied after stumbling in the early going, lifted by the Fed minutes and a solid profit outlook from Hewlett-Packard Co (HPQ.N). The Dow Jones industrial average .DJI ended up 90.04 points, or 0.73 percent, at 12,427.26 and the Nasdaq Composite Index .IXIC rose 20.90 points, or 0.91 percent, to 2,327.10.
$1=$1.01 Canadian Editing by Peter Galloway