March 5, 2008 / 10:43 PM / 11 years ago

UPDATE 3-Toronto stocks push higher on robust oils, golds

(Adds details, analyst comments)

By Natalie Armstrong

TORONTO, March 5 (Reuters) - The Toronto Stock Exchange’s main index rallied strongly on Wednesday, buoyed by robust resource issues as oil and gold prices hit record highs.

The S&P/TSX composite index .GSPTSE officially closed up 126.51 points, or 0.9 percent, at 13,603.32.

“Investors are selling down anything related to the consumer,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“With a slowing economy, slowing income growth, higher energy prices, consumers would probably rather heat their homes than buy new clothes or buy other discretionary items.”

Overall, six of the TSX index’s 10 main groups were up, with the materials group 2.3 percent higher, and energy issues rising 2.0 percent.

The gold producers subindex, part of the materials group, jumped 10.8 percent as bullion hit a record near $1,000 an ounce on Wednesday, boosted by strong oil prices and a record low U.S. dollar.

Kinross Gold (K.TO) rose C$1.19, or 4.8 percent, to C$26.05, and Goldcorp (G.TO) was up C$1.41, or 3.3 percent, at C$43.88.

Oil prices hit a record near $105 a barrel on Wednesday as OPEC decided to maintain output levels and data showed a sharp draw on U.S. crude inventories.

Canadian Natural Resources (CNQ.TO) closed C$1.50, or 2 percent, higher at C$76.45. Talisman Energy TLM.TO was up 67 Canadian cents, or 4 percent, at C$17.62.

Toronto’s key index gained more than 170 points early in the day before losing some traction as the banking sector reversed course amid disappointment over a capital raising plan from U.S. bond insurer Ambac Financial Group ABK.N.

Canadian Imperial Bank of Commerce (CM.TO) fell 84 Canadian cents, or 1.3 percent, to C$64.35. Bank of Montreal (BMO.TO) was down C$1.87, or 4 percent, at C$45.02, extending its slide after it reported weaker than expected earnings on Tuesday.

“Investors are still a little fearful of what’s going on in the credit markets, in turn at the banks,” Nakamoto said.

The telecoms sector ended 0.5 percent higher despite a 3.7 percent, or C$3.82, fall in heavyweight Research In Motion RIM.TO to C$100.43.

“It’s a real tug-of-war,” said Irwin Michael, portfolio manager at ABC Funds.

“It’s a real difference of opinion between the bulls and the bears and there’s still a lot of negativity out there. And, at the same time, negative sentiment is so high that a number of stocks are being priced at extremely low levels relative to their fundamental value.”

Market volume was a heavy 502.6 million shares worth C$9 billion. Advancers outpaced decliners 950 to 655. The blue chip S&P/TSX 60 index .TSE60 closed 8.03 points higher, or 1 percent, at 799.56.

South of the border, stocks rose as investors’ recession fears eased after better than expected services sector data.

The Dow Jones industrial average .DJI rose 41.19 points, or 0.3 percent, to close at 12,254.99. The Nasdaq Composite Index .IXIC advanced 12.53 points, or 0.6 percent, to close at 2,272.81.

$1=$0.98 Canadian Reporting by Natalie Armstrong; Editing by Rob Wilson

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