November 3, 2008 / 5:17 PM / 10 years ago

CANADA STOCKS-Toronto accelerates higher, mood cautious

* Eight of 10 sectors rise on renewed market optimism

* Declining oil price drag on energy issues

* Canadian Natural Resources is top net loss leader

TORONTO, Nov 3 (Reuters) - The Toronto Stock Exchange’s main index rose 1 percent on Monday at noon with most sectors advancing on optimism that the global recession expected next year will be short and shallow, but gains were held in check by declining energy issues.

After a dismal October, investors’ appetite seemed to be returning as global markets kicked off November with gains against a background of easier monetary policy designed to pull economies away from severe recession. [MKTS/GLOB]

Shortly after noon, the S&P/TSX composite index .GSPTSE was up 100.26 points, or 1 percent, at 9,863.02.

While eight of the index’s main 10 groups advanced, the heavily weighted oil and gas sector fell 1.42 percent.

The opening mood was one of caution, said Michael Sprung, president at Sprung & Co. Investment Counsel, given that the TSX was down 16.9 percent in October, its biggest monthly drop in nearly a decade.

“If anything, we might hope to see a little bit more stability in the market this week,” Sprung said.

“Oil prices are down a little bit today, but I would suspect people have some optimism as to the effects that the cutbacks from the Middle East will have that should help to support prices in this area.”

Oil fell towards $65.50 a barrel on concerns that demand will continue to be curbed by a slowing economy even as OPEC begins to implement production cuts it agreed to last month. [ID:nN03359725]

Canadian Natural Resources (CNQ.TO) was among the top net loss leaders, down 2.55 percent at C$59.27. Other energy issues also fell, including EnCana (ECA.TO), which lost 1.7 percent to C$60.20.

The materials sector gained 2.3 percent on firmer prices for some metals, including gold and silver. The industrials group, which includes transportation issues, was also a strong contributor, up 2.8 percent, as was the financials group, up 2.1 percent.

In individual news, High River Gold HRG.TO was the most heavily traded stock on Monday, extending losses from last week as its future was in doubt because of debt troubles.

High River shares fell 41 percent to 6.5 Canadian cents, building on the 33 percent lost on Friday when it said its existence could be in jeopardy as it is in breach of certain financing agreements. [ID:nN31600304]

Silver Wheaton SLW.TO was among the strongest mining issues on the TSX, up 13.8 percent at C$4.78 as it reported higher quarterly profit. [ID:nN03519873]

Sprung said some market focus was turned to Tuesday’s U.S. presidential election. Canadian investors will look for signs that the new U.S. administration will help steer markets clear of the financial crisis threatening the global economy.

Democrat Barack Obama heads into Tuesday’s voting ahead in the polls over Republican John McCain. (Reporting by Ka Yan Ng; editing by Rob Wilson)

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