January 2, 2008 / 4:24 PM / 11 years ago

UPDATE 2-Toronto stocks remain buoyant on gold, energy

(Updates with details, analyst comment)

TORONTO, Jan 2 (Reuters) - The Toronto Stock Exchange’s main index began the year with an jump on Wednesday but then pared some of those gains as soft financials partly offset soaring gold and energy issues.

The price of spot gold reached a 28-year high, lifting the TSX gold subsector 3.6 percent.

Meanwhile, violence in OPEC members Nigeria and Algeria helped boost the price of U.S. crude oil. Energy-sector buyers were also emboldened by firm natural gas futures.

“The energy index hasn’t moved very much with costs going up faster than the commodity prices,” said Glenn MacNeill, vice-president of investments at Sentry Select Capital Corp.

“The (energy) industry needs to get its costs back down.”

The S&P/TSX composite index .GSPTSE was up 86.65 points, or 0.6 percent, at 13,919.71 by mid-morning, with the materials group ahead 2.6 percent and energy up 1.6 percent.

The index rose as much as 112 points earlier in the session.

Barrick Gold (ABX.TO) climbed C$2.57 to C$44.34 and Goldcorp (G.TO) added C$2.18 to C$35.98.

EnCana (ECA.TO), Canada’s biggest oil and gas producer and the index’s fourth-biggest member by weight, was up C$1.49 at C$68.99, while Suncor Energy (SU.TO), sixth-biggest on the index, was up C$2.00 at C$109.91.

Banks and other financial institutions pulled in the opposite direction. The sector was down 0.8 percent after logging a modest loss in 2007.

“I think we’re about half way through this subprime housing crisis, and that is a whole cleansing process that we’ll have to go through,” MacNeill said.

Manulife Financial (MFC.TO), the index’s second-biggest listing, was off 40 Canadian cents at C$40.17.

In 2007, the composite index logged a 7.2 percent gain.

$1=$0.99 Canadian Reporting by Jonathan Spicer; Editing by Rob Wilson

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