February 25, 2008 / 9:36 PM / 10 years ago

UPDATE 3-Toronto stocks lifted by climbing resource shares

(Updates with official closing numbers, adds details, quotes)

TORONTO, Feb 25 (Reuters) - The Toronto Stock Exchange’s main index finished strongly higher on Monday, supported by gains in energy and resource shares, and further lifted by relief over the health of U.S. bond insurers.

The energy sector, which accounts for about 25 percent of the index, rose 2.3 percent as oil prices climbed above $99 a barrel amid cold weather in Europe and parts of the United States.

In Toronto, Canadian Natural Resources (CNQ.TO) was up C$2.94, or 4.3 percent, at C$71.56, while Suncor Energy (SU.TO) added C$1.83, or 1.9 percent, to C$99.34.

The market had a late-day rally after Standard & Poor’s said it had ended its downgrade review for U.S. bond insurer MBIA Corp (MBI.N) and affirmed the ratings of Ambac Financial Group (ABX.N).

“(There‘s) relief that the bond insurance companies - the Ambacs, the MBIAs, the monolines - are not getting downgraded, at least imminently,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

“I think that propelled the second leg of the market rise today.”

The S&P/TSX composite index .GSPTSE closed up 111.52 points, or 0.82 percent, at 13,697.45 with six of its 10 main groups climbing.

The resource-laden materials sector pushed up 1.2 percent, with Potash Corp of Saskatchewan (POT.TO) gaining C$4.93, or 3.1 percent, to C$163.45, and Agrium Inc (AGU.TO) adding C$2.49, or 3.5 percent, to C$73.98.

But the subindex of gold producers slid 1.3 percent as the price of bullion stumbled. Barrick Gold (ABX.TO) was down C$1.31, or 2.6 percent, at C$49.32.

The heavyweight financial sector treaded water to finish 0.3 percent lower, but banking stocks were mixed with Royal Bank of Canada (RY.TO) down 31 Canadian cents, or 0.6 percent, at C$50.19, and Canadian Imperial Bank of Commerce (CM.TO) edging up 49 Canadian cents, or 0.7 percent, to C$68.10.

“The expectation was that the Canadian financials’ exposure to MBIA and Ambac was relatively limited and, as a result, we’re seeing limited relief from the lack of worries today,” Warne said.

She added that the news was canceled out by concerns raised by an International Monetary Fund report that said Canadian economic growth will slow to 1.8 percent this year. The report also noted that there is a risk of an even steeper slowdown as troubles in the U.S. housing sector infect the rest of the economy.

$1=$1.00 Canadian Reporting by Leah Schnurr; Editing by Peter Galloway

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