June 1, 2009 / 8:38 PM / 10 years ago

CANADA STOCKS-TSX hits 7-month high, oil shares power gain

* TSX ends up 233.99 points at 10,604.06

* Energy shares lead with 4.6 percent surge

* Drop in gold-mining shares cap gain (Adds details and official numbers)

By Frank Pingue

TORONTO, June 1 (Reuters) - Toronto’s main stock index rose more than 2 percent on Monday, and at one point hit its highest level in more than seven months, as a surge in oil prices lit a fire under its energy sector.

The weighty energy sector led the latest charge in the key Toronto index, now up 41.7 percent since hitting a five-year low in March, as expectations for a global economic recovery helped send oil prices more than 2 percent higher.

Shares of EnCana Corp (ECA.TO), the biggest driver behind Monday’s gain, rallied 4.7 percent to close at C$62.85, while shares of Canadian Natural Resources (CNQ.TO) rose 5.3 percent to C$68.16. The energy sector ended up 4.59 percent.

The surge in the energy sector easily offset the drag from the materials group, which checked out of the session down 0.42 percent as gold shares fell on lower bullion prices.

A 2.25 percent rise by the financials group, which accounts for about 33 percent of the index, also helped power the index’s triple-digit gain. Investors bought shares of Canadian banks as most had stronger-than-expected quarterly results last week.

The S&P/TSX composite index .GSPTSE closed 233.99 points, or 2.26 percent, higher at 10,604.06. Just after midday, the TSX reached 10,637.73, its highest level since Oct. 14.

“It was all follow-through buying from last week in the financials and some extremely strong momentum in the energy group,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.”

“So it’s a pretty strong gain considering that one of the heavyweight groups, the materials group, was sort of a drag on the index, and that’s mainly because of the gold stocks.”

$1=$1.09 Canadian Reporting by Frank Pingue; Editing by Jeffrey Hodgson

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