TSX powers higher on oils, financials

Mon Nov 24, 2008 6:08pm EST
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By Ka Yan Ng

TORONTO (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 lifting market sentiment, particularly in the financial group.

The energy sector forged ahead 7.1 percent, supported by the oil price gain. Crude rose more than 8 percent as investors considered the prospect of a further OPEC supply cut and as stock markets rallied on the Citigroup news.

"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."

Canadian Natural Resources gained 8.2 percent to C$45, while Petro-Canada rose 10 percent to C$24.75.

But advances in the materials sector evaporated by the session's end as profit-taking ensued after gold prices hit a five-week high. The group was one of the main sources of early strength but ended modestly lower, down 0.54 percent.

Goldcorp trimmed gains, ending up 1.6 percent to C$31.52. But shares of NovaGold plunged nearly 70 percent to 72 Canadian cents after it said it was facing a cash crunch and had suspended operations at its only producing mine.

The S&P/TSX composite index closed up 285.48 points, or 3.5 percent, at 8,440.87. Five sectors advanced, including the heavily weighted energy and financial groups. Information technology and utilities were among the decliners.

The Toronto gains build on Friday's broad 5 percent rise, but some analysts were skeptical that the index could hang on to its gains given recent market patterns.   Continued...

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