TSX ends at 15-month high on resource rally

Mon Jan 4, 2010 5:26pm EST
 
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By Ka Yan Ng

TORONTO (Reuters) - Toronto's main stock market finished at its highest level in 15 months on Monday, rising more than 1 percent as soaring oil and gold prices and global manufacturing data suggested more improvement in the world economy.

Eight of the top 10 heavyweight advancers were resource-based stocks, including oil companies Suncor Energy and EnCana Corp, as oil prices soared above $81 a barrel, and the prices of gold and other precious metals also rallied.

Overall, the index's energy group rose 2.29 percent, while its mining-heavy materials sector climbed 2.55 percent. Seven of the key index's 10 main groups higher.

Suncor was the biggest heavyweight riser, up 2.9 percent to C$38.30, while EnCana shot up 4.7 percent to C$35.71. Diversified miner Teck Resources rallied 5.95 percent to C$39.01, while Barrick Gold rose 1.5 percent to C$42.08.

Manufacturing data from major economies reinforced evidence that a global recovery may be in motion. Chinese manufacturing grew at its fastest pace on record in December, while U.S. factories marked their best month in nearly four years. Other data showed strength in British and euro zone factory production growth.

"Clearly the stronger manufacturing reports out of China, Europe, and the U.S. are giving investors a bit more confidence that we'll see continued strong economic growth," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

"That's the reason we're seeing the TSX led higher by energy and materials. The commodities are the most sensitive to expectations about higher growth."

The gains on the first trading session of 2010 put the key Toronto index at its highest level since late September 2008, when a global slide in equity markets was triggered by the collapse of U.S. investment bank Lehman Brothers.   Continued...

 
<p>Bay Street signs are seen in the heart of the financial district in Toronto, August 17, 2009. REUTERS/Mark Blinch</p>