June 25, 2009 / 2:44 PM / 8 years ago

CANADA STOCKS-TSX heads higher as oil, gold strengthen

3 Min Read

* TSX up 1.16 percent, at 10,218.10

* Energy sector, up 1.9 percent, leads rally (Adds details, quotes)

By Jennifer Kwan

TORONTO, June 25 (Reuters) - Toronto's main stock market index rose broadly on Thursday morning as firmer oil and gold prices boosted the TSX index's heavily weighted resource sectors.

The energy sector rose 1.9 percent as the price of oil climbed above $69 a barrel. [ID:nSP191786] Canadian Natural Resources (CNQ.TO) rose 3.3 percent to C$58.62 and Suncor Energy (SU.TO) climbed 2.6 percent to C$34.20.

The mining-heavy materials group rose 1.8 percent. Goldcorp (G.TO) was up 2.9 percent at C$41.66.

The TSX's strength on Thursday belies increased caution in the market following the index's big runup in recent months, said Rick Meslin, head of Canadian equities at UBS.

"It is an arm wrestle now, with certainly a lot more caution in the market than there has been in the past two months," said Meslin. "But there's a lot of cash left to deploy and people want to make sure they get set up for the month end, quarter end trade."

"This is more a sentiment and positioning trade than some sort of material and fundamental reason as to why things are up today.".

At 10:05 a.m. (1405 GMT), the S&P/TSX composite index .GSPTSE was up 117.17 points, or 1.16 percent, at 10,218.10, after sagging about 10 points at the open. All of its 10 main groups were higher.

The TSX index wavered at the start as U.S. jobs data threatened to weigh on sentiment. Figures on Thursday showed the number of U.S. workers filing new claims for jobless benefits unexpectedly rose last week. [ID:nN25259749]

Thursday's TSX rise follows a 2 percent spike in the previous session after an Organization for Economic Co-operation and Development report said the global economic outlook has improved for the first time in two years.

Financials rose 1.4 percent, with Toronto-Dominion Bank (TD.TO) up 1.6 percent at C$57.87, and Bank of Nova Scotia (BNS.TO) also up 1.6 percent at C$41.36.

On the downside, Research In Motion RIM.TO dropped 1.1 percent to C$80.82.

$1=$1.16 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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