Stock index rides oil surge above 15,000

Tue May 20, 2008 5:43pm EDT
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By Leah Schnurr

TORONTO (Reuters) - The Toronto Stock Exchange's main index finished above 15,000 for the first time on Tuesday, propelled by a surge in energy and gold producers amid a continuing run-up in oil prices.

Oil and gas companies were among the biggest advancers by weight with Suncor Energy SU.TO up C$4.84, or 7.2 percent, at C$72.37, and Imperial Oil IMO.TO climbing C$4.27, or 7.5 percent, to C$60.95.

The sector overall bounded up 3.1 percent, while oil, a key underlying commodity for the resource-heavy TSX, extended its red-hot advance, coming close to $130 a barrel. Crude was lifted by bullish price forecasts and growing worries over tight global stockpiles.

"I think there's a real rethinking among investors - all of a sudden they're thinking maybe the $125 oil price is floor rather than ceiling" said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

"If one believes that, you've changed your portfolio in the sense that obviously you add more oil and gas companies because I don't believe most of the oil and gas companies are trading at anywhere close to $125 oil."

The S&P/TSX composite index .GSPTSE closed up 63.14 points, or 0.42 percent, at 15,047.34. The energy and materials sectors were the sole groups to end positive.

Since the beginning of May, the index has spiked more than 1,000 points, setting record highs after surpassing the previous record that was hit last July.

Also in the oil patch on Tuesday, Petrobank Energy and Resources PBG.TO jumped C$3.54, or 6.4 percent, to C$59.00 after a report that India's Oil and Natural Gas Corp ONGC.BO was readying a bid for a Canadian oil producer. A Petrobank executive dispelled speculation that the firm was the target.   Continued...

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch</p>