June 5, 2008 / 8:49 PM / 11 years ago

UPDATE 3-Toronto stocks surge, fueled by oil

(Updates closing numbers, adds details)

*Index ends 2 percent higher after late-day surge

*Resource groups rally along with a jump in oil prices

*MDS falls after profit drops and lowers 2008 outlook

TORONTO, June 5 (Reuters) - A surge in the price of oil helped the Toronto Stock Exchange’s main index vault 2 percent higher on Thursday as energy and other resource issues charged ahead.

The index’s heavyweight energy sector surged 4 percent, yanked higher as the price of oil climbed more than $5. Crude finished over $127 a barrel while the U.S. dollar weakened after the European Central Bank suggested it could raise interest rates this year.

Among the biggest gainers, Canadian Natural Resources (CNQ.TO) jumped C$6.24, or 6.4 percent, to C$103.64, while Canadian Oil Sands Trust COS_u.TO put on C$2.44, or 5 percent, to C$51.46.

The materials sector also threw its weight behind the rise, adding 3.3 percent, with miners caught in the upward momentum. Barrick Gold (ABX.TO) rose C$1.51, or 3.8 percent, to C$41.17, and Inmet Mining IMN.TO advanced C$1.85, or 2.7 percent, to C$69.40.

The S&P/TSX composite index .GSPTSE closed up 292.45 points, or 1.99 percent, at 14,982.91 with all but one of its 10 main sectors pointing up.

Fertilizer firm Potash Corp of Saskatchewan POT.TO added support, up C$9.84, or 4.6 percent, at C$222.34, while Agrium AGU.TO gained C$4.33, or 4.8 percent, to C$94.35.

In the oil patch, shares of Imperial Oil (IMO.TO) rose C$2.03, or 3.5 percent, to C$59.64 as the company said a water-use permit allowing construction of its Kearl oil sands project could be reissued as soon as Friday.

On the downside, medical services company MDS MDS.TO fell C$1.70, or 9.1 percent, to C$16.90 after it said its quarterly profit fell and lowered its 2008 outlook.

The small telecoms sector was the only group in negative territory, edging down 0.3 percent. Shares of Rogers Communications (RCIb.TO) were off 64 Canadian cents, or 1.5 percent, to C$41.00. ($1=$1.02 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)

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