June 1, 2009 / 2:10 PM / 10 years ago

CANADA STOCKS-TSX rides oil shares to 7-month high

* TSX up 209.97 points at 10,580.04

* Energy shares lead with 3.8 percent surge

* All 10 TSX sectors in higher territory (Adds details)

By Frank Pingue

TORONTO, June 1 (Reuters) - Toronto’s main stock index shot higher on Monday morning, reaching its highest level in more than seven months, as a surge in oil prices helped light a fire under its energy sector.

Energy shares gained 3.8 percent as expectations for a global economic recovery helped send oil prices more than 2 percent higher.

Shares of oil company Canadian Natural Resources (CNQ.TO), the biggest contributor to the index’s gains, rose 5.4 percent to C$68.22, followed by EnCana Corp (ECA.TO), up 3.8 percent at C$62.32.

Another factor behind the index’s gain was data released early on Monday that showed Canada’s economy shrank less in the first quarter than was expected by analysts. [ID:N01454666]

“It’s a good start to the week as we’ve gotten through the majority of the earnings season with no big surprises,” said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.

“And we’ve seen a deceleration of the downturn in the economy, which is sort of what you need as a precursor to start to have the economy improve somewhat.”

At 9:53 a.m. (1353 GMT), the S&P/TSX composite index .GSPTSE was up 209.97 points, or 2.02 percent, at 10,580.04, its highest level since Oct. 14. All 10 TSX sectors were higher.

$1=$1.08 Canadian Reporting by Frank Pingue; editing by Peter Galloway

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