February 4, 2009 / 9:55 PM / 10 years ago

CANADA STOCKS-Commodity shares drive higher, ING brakes rise

* Resource stocks higher, metals prices rise

* ING Canada falls 14.7 pct as Dutch bank sells stake (Adds details, quote, updates figures)

TORONTO, Feb 4 (Reuters) - Toronto’s main stock index rose for a second consecutive day on Wednesday as mining shares were boosted by a rise in underlying commodity prices, but weakness in financials kept the gains in check.

The resource-laden index’s materials sector led the gain with a 3.9 percent rise, boosted by stronger gold and base metals prices.

The energy group finished the day up 1.4 percent even though oil prices CLc1 settled down at $40.32 a barrel after a U.S. government report showed a larger than expected build in crude inventories. [ID:nSP363085]

Heavily weighted issues that helped the market higher included Potash Corp POT.TO, up 4.7 percent at C$97.65, and Barrick Gold (ABX.TO), which climbed 3.7 percent to C$45.73. In the oil patch, Suncor Energy (SU.TO) rose 3.3 percent to C$24.30.

The big financial services group started the day in the red, crept into positive territory, and fell back to end down 1.3 percent.

The weakness in the sector helped to trim gains on the index, which rallied as much as 2 percent earlier in the day. Toronto-Dominion Bank (TD.TO) dropped 1.6 percent at C$38.74.

“There’s an expectation of bad news ... any time the financials show any strength then the selling starts to come in,” said David Cockfield, senior vice president and portfolio manager at Leon Frazer & Associates in Toronto.

The S&P/TSX composite index .GSPTSE closed up 64.46 points, or 0.75 percent, at 8,693.09, with seven of its 10 main groups were higher.

The financial sector wasn’t helped by ING Canada IIC.TO, which was the market’s top net loser, dropping 14.7 percent to C$28.82 after its former parent, ING Groep NV ING.AS of the Netherlands, said it was selling the last chunk of its ownership stake in the Canadian insurer.

The stock sold off sharply, partly because of market jitters over the deep price discount that ING Groep offered in its aggressive stock sale. [ID:N04300472]

Analysts said uncertainty over the fate of the ailing U.S. banking sector and ahead of January jobs reports from Canada and the United States on Friday also weighed on the financial sector.

$1=$1.23 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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