TORONTO (Reuters) - Toronto’s main stock index closed higher for a third straight session on Thursday in a broad rally led by strength in the key energy and materials groups, which rose on higher commodity prices.
Materials, home to mining and fertilizer companies, rose 4.2 percent and led the index higher. Among heavily weighted gainers were miner Barrick Gold (ABX.TO), up 4.2 percent at C$47.65, and fertilizer producer Potash Corp of Saskatchewan (POT.TO), the top net gainer, which rose 8.7 percent to C$106.10.
The oil and gas group rose 1.9 percent as the price of crude settled higher at $41.17 a barrel on hopes for a U.S. stimulus plan. EnCana Corp (ECA.TO) was up 2.8 percent at C$55.70.
Also helping the index higher was the big financial services sector, which fought back from a 1.6 percent drop to finish the day up 1.8 percent, in part on optimism over a possible plan to shore up the ailing U.S. banking sector. Royal Bank of Canada (RY.TO) rose 2 percent to C$31.24.
Mining stocks were higher despite softness in base metals prices, which could be a sign that investors are pricing in the prospect of recovery, said Bob Gorman, chief portfolio strategist at TD Waterhouse.
“I do think you have some nibbling there,” he said. “It’s a combination of the supply response and people looking ahead.”
The S&P/TSX composite index .GSPTSE closed up 167.89 points, or 1.93 percent, at 8,860.98, with nine of its 10 main groups higher. Earlier, it dropped nearly 1 percent.
The lone sector in the red was utilities, down 0.3 percent.
Husky Energy (HSE.TO), Canada’s No. 2 oil producer and refiner, fell 1.8 percent to C$29.40 after it reported lower quarterly results and chopped its dividend.
Auto-parts maker Magna International MGa.TO and plane and train maker Bombardier (BBDb.TO) were among several Canadian companies to announce layoffs.
Bombardier was down 4.6 percent at C$3.55 after it said it plans to cut more than 1,300 jobs as it braces for a 10 percent drop in business jet orders.
Magna rose 3.1 percent at C$36.87 after it said it would shut a plant in Syracuse, New York, which will ultimately eliminate 1,400 jobs.
Elsewhere, Certicom Corp CIC.TO said Research In Motion’s RIM.TO C$3-a-share sweetened takeover offer for the electronic security company is a superior bid to a previous bid from VeriSign Inc (VRSN.O).
Certicom rose 1.3 percent to C$3.20, while RIM rose 1.22 percent to C$69.94.
Also, the Ontario Securities Commission approved a settlement with RIM executives on Thursday, in which they will repay tens of millions of dollars in a case related to stock-option allegations dating back to 1996.
Reporting by Jennifer Kwan; editing by Peter Galloway