CANADA STOCKS-Resources, banks propel TSX higher

Mon Nov 24, 2008 4:52pm EST
 
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* Energy group advances as oil rises nearly 9 pct

* Royal Bank stock higher despite profit warning

* Citigroup rescue helps lift sentiment (Adds details, analyst comment, official closing figures)

TORONTO, Nov 24 (Reuters) - The Toronto Stock Exchange's main index gained 3.5 percent on Monday, with resource issues supported by rising oil prices and the U.S. government's rescue plan for banking giant Citigroup C.N lifting market sentiment, particularly in the financial group.

The big energy sector forged ahead 7.1 percent, supported by the gain in the price of oil. Crude rose nearly 9 percent as investors considered the prospect of a further OPEC supply cut and as stock markets rallied following the Citigroup news. [ID:nSYD419333]

The financial group advanced 4.68 percent, reversing a loss earlier in the day brought on by an earnings warning from Royal Bank of Canada RY.TO. [ID:nN24501121]

That prompted an early drop in RBC shares, as well as its peers, which was later offset by positive reaction to Washington's Citigroup move, [ID:nN24499982] with concerns about weaker Canadian bank earnings being outweighed by relief that the global financial system might have avoided collapse.

"The news filtering through the system that Citi has received some aid is a great relief to the entire banking community," said Michael Sprung, president at Sprung & Co. Investment Counsel.

"There was certainly severe fear of the effects of what would happen if Citi were to go down."

Royal Bank, the third Canadian bank to provide a warning in the past week, gained 6.91 percent to C$39.

The S&P/TSX composite index .GSPTSE closed up 285.48 points, or 3.5 percent, at 8,440.87. (Reporting by Ka Yan Ng; editing by Rob Wilson)