CANADA STOCKS-TSX drives higher but closes off 7-month high

Wed May 20, 2009 5:44pm EDT
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* TSX rises 1.3 pct to finish at 10,232.44

* Energy, materials lead rally

* Profit-taking pares market's early gains (Adds details, quotes, updated numbers)

By Cameron French

TORONTO, May 20 (Reuters) - Toronto's main stock index climbed more than 1 percent on Wednesday, boosted by rising oil and gold prices, but it pared stronger early gains as investors took profits after a sharp two-day rise.

The index rose by as much as 2.6 percent shortly after the open, touching a seven-month peak of 10,365.39, as oil charged to a six-month high above $62 a barrel, while gold climbed to an eight-week high above $940 an ounce.

Energy issues rose 2.17 percent, while the mining-heavy materials sector climbed 3.03 percent, largely on the back of gold stocks.

"Pretty much everything in terms of commodities is up, so that sort of says in a word what drives the Canadian market," said Ian Nakamoto, director or research at MacDougall, MacDougall & MacTier.

Among materials stocks, Yamana Gold (YRI.TO: Quote) surged 7 percent to C$11.42, while Goldcorp (G.TO: Quote) climbed 6.3 percent to C$42.14. Stronger copper prices also boosted the sector.   Continued...