Toronto stock index soars on resource strength

Mon Oct 20, 2008 6:35pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - The Toronto Stock Exchange's main index soared more than 7 percent in a broad-based rally on Monday as resource issues climbed on strength in underlying commodity prices.

The rise added to the 3.16 percent gain logged on Friday as the resource-heavy benchmark got a big boost from the oil and gas sector, which soared 14.3 percent. Canadian Natural Resources finished ahead 15.9 percent at C$58.55, and EnCana Corp was up 14.4 percent at C$57.07.

Oil jumped more than 3 percent to close at $74.25 a barrel, lifted by expectations that OPEC ministers will agree to cut production at an emergency meeting set for Friday.

The materials group, which includes metals and fertilizer companies, jumped 10.8 percent as gold prices rose. Agnico Eagle climbed 9.7 percent to C$47.06, while Potash Corp of Saskatchewan rose 9.9 percent to C$97.45.

Concerns over fallout from the credit crisis have eased as banks begin lending to each other again, said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

However, markets are now "moving from financial risk to economic risk," he said, noting that investors are questioning: "If we are in a recession, how deep is it and what is the impact of it on various sectors?"

The S&P/TSX composite index closed up 688.91 points, or 7.2 percent, at 10,251.40, with all but one of its 10 main groups higher.

The gains build on the strong finish last week when the index snapped a three-week losing streak with a 5.5 percent weekly rise, its biggest such gain since October 2002.   Continued...

<p>People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch</p>