Strong oil boosts TSX despite gold's fall

Wed Oct 14, 2009 5:59pm EDT
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By Ka Yan Ng

TORONTO (Reuters) - Toronto's main stock index closed higher on Wednesday as rising oil prices lifted Suncor Energy and other oil and gas shares, while upbeat U.S. corporate earnings helped boost sentiment.

Suncor, the biggest contributor to the gain, jumped 4.29 percent to C$40.36, while shares of fellow oil company Canadian Natural Resources advanced 3.4 percent to C$77.49.

The rally in energy stocks came as the price of oil surged to a 2009 high above $75 a barrel due to optimism about a global economic rebound that would lead to higher energy demand.

The S&P/TSX composite index hit its highest level in nearly three weeks, closing up 119.24 points, or 1.04 percent, at 11,532.78.

In New York, the Dow industrials average pierced the 10,000 level for the first time in a year, encouraged by better-than-expected U.S. retail sales for September and surprisingly robust financial results from banking and technology bellwethers JPMorgan Chase and Intel Corp.

That helped light a fire under bank stocks in Toronto. Royal Bank of Canada added 1.5 percent to C$55.94, and Toronto-Dominion Bank rose 1.7 percent to C$65.72.

"(JPMorgan's) capital markets division performed extremely well, so that's a good read-through for the Canadian banks that are more levered to capital markets," said Eric Brass, a portfolio manager with MFC Global Investment Management in Toronto.

Canada's earnings calendar starts to ramp up in the next several weeks, and the market will look to see if corporate results show improvement to the bottom line beyond cost-cutting now that the global economy is emerging from recession.   Continued...

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