CANADA STOCKS-TSX gains as oil price hits two-year high

Wed Dec 22, 2010 11:18am EST
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 * TSX gains 0.1 percent to 13,379.37
 * Rise in energy shares spurred by oil price above $90
 (Adds details)
 TORONTO, Dec 22 (Reuters) - Toronto's main stock index was
slightly higher on Wednesday morning, pushed up almost
single-handedly by oil and gas shares as oil prices hit a
two-year high.
 Seven of the index's 10 main groups were lower in early
dealings, and the 0.97 percent advance in the hefty oil and gas
group was the index's key support.
 Oil rose above $90 a barrel for only the third time in two
years, supported by a report showing a drop in U.S. oil and
gasoline inventories as well as by cold weather and a weaker
dollar. It hit its highest level since October 2008. [O/R]
 Canadian Natural Resources CNQ.TO gained 1.1 percent to
C$44.36, while EnCana ECA.TO was up 1.1 percent at C$29.53.
Nexen NXY.TO rose 1.37 percent to C$22.14, and Canadian Oil
Sands Trust COS_u.TO was up 1.65 percent at C$25.91. Suncor
Energy SU.TO rose 1.8 percent to C$38.91.
 "The bulk of the strength is coming from the energy
sector...for the very simple reason that crude oil futures are
strong here this morning," said Fred Ketchen, director of
equity trading at ScotiaMcLeod.
 "The chatter seems to be that crude oil prices are not
going down any time soon. They will probably continue to rise
... Other than that, there isn't a lot of excitement. A lot of
people are standing on the sidelines watching."
 At 11:10 a.m. (1610 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was 14.22 points, or 0.1
percent, higher at 13,379.37.
 There were small gains in financials, up 0.21 percent,
which Ketchen attributed to a continued lift from expectations
that the country's biggest banks are poised to boost their
dividends sometime next year.
 Market reaction was muted towards U.S. economic news, which
showed economic growth was a touch stronger than previously
estimated in the third quarter, but consumer spending was
softer. [ID:nN22291718]
 ($1=$1.02 Canadian)
 (Reporting by Ka Yan Ng; editing by Peter Galloway)