August 5, 2009 / 9:25 PM / 10 years ago

CANADA STOCKS-TSX closes above 11,000 for second day

* TSX up 28.83 points, or 0.26 percent, at 11,046.93

* Gets lift from mining stocks as base metals prices rise

* Financials up 0.6 percent (Adds details, quotes)

By Jennifer Kwan

TORONTO, Aug 5 (Reuters) - Toronto’s main stock index eked out a modest gain on Wednesday to hold at 10-month highs as strength in base metal prices boosted mining issues and investors bet on strong global economic growth and demand.

The TSX’s materials group, home to miners and fertilizer companies, rose 0.8 percent, lifted by Potash Corp of Saskatchewan POT.TO, which gained 4.6 percent to C$107.50, while miner Teck Resources TCKb.TO was up 1.6 percent at C$29.55.

Shares of some gold miners fell in tandem with weaker gold prices [ID:nL5182069]. Goldcorp (G.TO) was down 0.9 percent at C$41.26, and Barrick Gold (ABX.TO) was off 0.13 percent at C$38.85.

“We’ve managed to stay above the 11,000 mark and that’s probably giving investors some comfort,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

“There may be some skepticism about whether that level is sustainable in the short term, so when you see the index hold above a level like that it gives investors some confidence.”

The S&P/TSX composite index .GSPTSE finished the day up 28.83 points, or 0.26 percent, at 11,046.93, closing above 11,000 for the second day in a row. Four of the index’s 10 main groups finished higher.

For much of the session, the Toronto index languished in the red as investors took a breather after Tuesday’s 2 percent surge past the 11,000 mark.

The energy group fell 0.6 percent on Wednesday on profit-taking, even though the price of oil CLc1 settled higher near $72 a barrel. EnCana Corp (ECA.TO) dropped 2.4 percent to C$57.47.

Picardo said the index also benefited from firmness among financials, which climbed 0.6 percent. Bank of Nova Scotia (BNS.TO) rose 1.6 percent to C$47.64, while Canadian Imperial Bank of Commerce (CM.TO) rose 2.3 percent to C$69.30.

“There continues to be enthusiasm for Canadian bank stocks as beneficiaries of an imminent turnaround in the economy,” Picardo said.

Bruce Latimer, trader at Dundee Securities, said Canadian banks followed U.S. banks higher. “I think it’s a spillover effect out of the U.S.,” he said.

U.S. stocks sagged on Wednesday on weak data for the services sector and private payrolls, but strength in financials limited the losses. [ID:nN05267011]

In Toronto, TriStar Oil & Gas Ltd (TOG.TO) was among the most heavily traded stocks, rising 22.6 percent to C$14.11.

Petrobank Energy and Resources Ltd PBG.TO said on Wednesday it has offered to buy TriStar Oil & Gas for C$2.24 billion in cash and stock, a deal that would boost its stake in a prolific Saskatchewan oil field and give it the heft to cut costs.

The blue chip S&P/TSX 60 index .TSE60 closed 1.25 points higher, or 0.19 percent, at 669.75.

$1=$1.07 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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