January 3, 2008 / 10:38 PM / 11 years ago

UPDATE 4-Toronto stocks extend resource-fuelled rally

(Adds details, quotes)

By Leah Schnurr

TORONTO, Jan 3 (Reuters) - The Toronto Stock Exchange’s main index closed higher on Thursday, lifted by strong resource issues, after gold and oil prices touched record highs for a second day in a row.

With only three sectors in positive territory, the materials and energy sectors provided the lion’s share of support, gaining 2.1 percent and 1.5 percent respectively.

“With the Canadian market really backed by a strong commodities sector and strong commodities prices, I guess we ought not to be surprised,” said Fred Ketchen, director of equity trading at ScotiaMcLeod. “We can probably figure it out as being rewarding to the kind of market that we have.”

The S&P/TSX composite index .GSPTSE closed up 51.44 points, or 0.37 percent, at 13,978.20, the fourth straight session that the index has ended higher

The index climbed more than 100 points to push above the 14,000 mark for the first time in three weeks, before easing, hampered in part by worries over inflation.

Barrick Gold (ABX.TO) rose C$2.78, or 6.1 percent, to C$48.43, while the gold subsector soared 3.7 percent as the price of bullion surged as high as $869.05 an ounce before easing to $862.90.

Oil briefly broke the $100 a barrel level it reached on Wednesday, before retreating 44 cents to settle at $99.18.

In the heavyweight energy sector, Suncor Energy (SU.TO) was up C$2.23, or 2 percent, at C$111.84, and Petro-Canada PCA.TO added 56 Canadian cents, or 1 percent, to C$55.35.

Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd in Calgary said that while the fundamentals might not support oil in excess of $100 yet, they do support it in the $80 range at the very least.

“Oil has a place to run but in the short term, it might be little ahead of itself,” said Kerkovius.

He also said Toronto’s oil stocks might still have some room to grow as they have been slow to adjust upward with the commodity price.

Financial shares led the way down, losing 0.7 percent, as Royal Bank of Canada (RY.TO) slipped 45 Canadian cents, or 0.9 percent, to C$49.75, and Toronto-Dominion Bank (TD.TO) gave up 38 Canadian cents, or 0.6 percent, to C$67.74.

Kingsway Financial Services Inc KFS.TO bucked the trend, rising 53 Canadian cents, or 4.5 percent, to C$12.44 after it allayed concerns that it would need to raise funds to help a struggling U.S. unit.

Ketchen said concern over inflation was one of the factors that took some of the earlier shine off the Toronto index.

“Any time you get oil prices doing what they’re doing, and you get gold prices doing what they’re doing, you always end up talking about what’s this going to do to inflationary strength in our economy,” he said.

“I would have to think there probably is some risk of inflation. However, if we see continuing weakness in economic growth in the U.S. and Canada, that may take away some of that.”

Market volume was 358 million shares worth C$6.2 billion. Advancers outpaced decliners 858 to 720. The blue chip S&P/TSX 60 index .TSE60 closed up 4.04 points, or 0.5 percent, at 818.31.

U.S. markets were little changed ahead of Friday’s payroll data, which investors fear may suggest the U.S. economy is headed for a recession.

The Dow Jones industrial average .DJI closed up 12.76 points, or 0.1 percent, at 13,056.72, while the Nasdaq composite index .IXIC fell 6.95 points, or 0.27 percent, to 2,602.68.

$1=$0.99 Canadian Editing by Rob Wilson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below