November 21, 2008 / 3:34 PM / 9 years ago

CANADA STOCKS-Commodity stocks help TSX rebound

3 Min Read

*TSX rises 1.5 percent after 9 pct fall Thursday

*Energy, materials up as oil edges higher, gold rises

*TD Bank slumps after brokerage cuts price target

*Canada October CPI eases sharply

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TORONTO, Nov 21 (Reuters) - The Toronto Stock Exchange's main index rose at the open on Friday as energy and materials stocks got a lift from firmer commodity prices after the market dropped 9 percent the previous session to its lowest in five years.

The key energy and materials sectors were up 2.8 percent and 6 percent, respectively, as oil and metals prices firmed.

Heavily-weighted stocks that helped the market higher included Bank of Nova Scotia (BNS.TO), up 1.8 percent at C$31.10, Goldcorp (G.TO), which rose 11 percent to C$27.53, and Canadian Natural Resources (CNQ.TO), higher by 3.7 percent at C$36.75.

"After what happened yesterday we saw a bit of a rebound happening overseas prior to the North American markets opening," said Michael Sprung, president at Sprung & Co. Investment Counsel.

"It's sort of typical of what we've been seeing over the last couple of months that after particularly devastating downward movements in the market, we've seen to some extent a rebound the next day."

"The big question is how long is the euphoria likely to last," he added. "We're already seeing it pulling back a bit this morning here."

At 10:15 a.m. (1515 GMT), the S&P/TSX composite index .GSPTSE was up 114.31 points, or 1.48 percent, to 7,839.07, with four of its 10 main groups higher. Earlier, it raced 4.6 percent higher but quickly gave back some of those gains.

The index sank to its lowest in five years on Thursday as an earnings warning from Toronto-Dominion Bank (TD.TO) triggered a pounding of the financials group and the price of crude slid below $50 a barrel. It was the biggest percentage drop for the index since October 1987.

TD Bank sank 3.5 percent to C$42.06 after RBC cut the bank to underperform from sector perform and reduced its price target to C$49 from C$53. [ID:nWNAB6266] TD Bank said on Thursday that the "dramatic" lack of liquidity in global credit markets will prompt charges of C$350 million for credit-trading losses, reducing its fourth-quarter earnings. [ID:N20398511]

In economic news, Canadian consumer prices registered their sharpest decline in nearly 50 years in October, dropping 1 percent from September as gasoline prices plummeted from recent high levels, Statistics Canada said on Friday. [ID:nN21500487] ($1=$1.28 Canadian) (Reporting by Jennifer Kwan; Editing by Frank McGurty)

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