TORONTO, Jan 2 (Reuters) - The Toronto Stock Exchange’s main index, fresh off a modest rise for 2007, looked set to start the new year higher on Wednesday due to rising crude oil and natural gas prices.
The S&P/TSX composite index .GSPTSE logged a 7.2 percent gain for 2007, and had a 1 percent gain in December.
The energy-heavy index was seen cuing off the price of U.S. crude oil, which rose more than $2 to $98 a barrel in early futures trade.
The index’s energy sector, which accounts for nearly a third of the overall index, could lead the way higher as instability in major oil exporter Nigeria threatened to crimp world supplies. For details, see: [nSP15197]
“Traditionally you get a new year’s rally. People feel a little more optimistic that the sins of last year have been dealt with,” said Rick Hutcheon, president and chief operating officer at RKH Investments.
TSX oil and gas stocks advanced 7.9 percent last year.
The spot gold price, another key indicator for the index, jumped to a two-month high, while natural gas and copper prices also rose.
European shares and U.S. stock futures were flat on Wednesday.
Last summer, the TSX index plunged more than 12 percent in a month as concern mounted over credit market problems, sentiment that remains center-stage going into the new year.
“It’s going to come down to how confident people are that the subprime mortgage issues are being effectively dealt with by the central banks, and owned up to by finance companies in the U.S., as well as the intermediate-term direction of the U.S. economy,” Hutcheon said.
“It’s just not that clear right now.”
The index starts 2008 at 13,833.06 after rising 11.72 points, or 0.1 percent, in the previous session. ($1=$0.99 Canadian) (Reporting by Jonathan Spicer; Editing by Peter Galloway)