(Adds portfolio manager comment, updates prices to close)
By Alastair Sharp
TORONTO, June 2 (Reuters) - Canada’s main stock index rose on Tuesday as higher commodity prices helped many energy producers and mining companies, and financial issues gained.
The Toronto Stock Exchange’s S&P/TSX composite index gained 30.61 points, or 0.20 percent, to 15,104.74. It ended with 155 issues advancing compared with 89 decliners.
A fall in the U.S. dollar pushed up a range of commodities priced in the currency, but lingering worries about demand in China and stretched valuations limited optimism.
“The valuations don’t make any sense on the current oil price. But everyone expects oil prices to come back to a better level,” said Barry Schwartz, portfolio manager at Baskin Financial Services.
A slump in oil has stung Canada’s large energy industry, although some of the most popular stocks have not fallen as far as commodities in recent months. That has left investors flatfooted as prices rebound off recent lows.
U.S. crude prices settled up 1.8 percent to $61.26, while Brent crude added 1 percent to $65.49.
The energy group gained 1 percent, while the materials group that includes miners moved 0.9 percent higher.
“We’re preaching caution right now,” said Philip Petursson, from the portfolio advisory group at Manulife Asset Management. “The data does not justify taking an aggressive stance.”
The most influential gainers on the index included First Quantum Minerals Ltd, up 5.0 percent to C$17.10, and Teck Resources Ltd, which advanced 5.7 percent to C$15.26.
Financial stocks moved 0.4 percent higher, with Royal Bank of Canada up 0.4 percent at C$79.13 and Toronto-Dominion Bank gaining 0.3 percent to C$54.36.
But for stock pickers, Baskin’s Schwartz said it is best to avoid the industries that dominate in Canada and look instead at food and drink, healthcare and information technology stocks.
“There are lots of great names out there that help keep the lights on and businesses running, and don’t have to worry about the price of gold or oil.” (Editing by James Dalgleish and G Crosse)