June 5, 2009 / 5:26 PM / 10 years ago

CANADA STOCKS-TSX rebounds as energy shares lead recovery

* TSX up 81.40 points at 10,558.64

* Energy shares help spur turnaround

* Gold-mining shares cap overall gain (Adds details)

By Frank Pingue

TORONTO, June 5 (Reuters) - Toronto’s main stock index was higher shortly on Friday afternoon after a shaky start to the session as a rise in oil prices lent a boost to energy issues and offset the drag of gold-mining shares.

Oil prices, down earlier in the day, turned higher to move closer to the psychologically important $70 a barrel level on hopes that global economic weakness is diminishing and demand will rise.

That helped boost shares of Suncor Energy (SU.TO) by 2.8 percent to C$38.56, while Petro-Canada PCA.TO followed with a gain of 3 percent to C$48.56. The index’s energy sector was up 1 percent.

But investor sentiment was undermined by data that showed the unemployment rate in Canada hit an 11-year high in May while the economy shed more jobs than expected. [ID:N05253705]

“The main point today was in Canada the employment numbers came out a little higher than expected and they were really bad numbers in Ontario,” said Steve Ibel, institutional equities trader at Beacon Securities in Halifax, Nova Scotia.

At 1:20 p.m. (1720 GMT), the S&P/TSX composite index .GSPTSE was up 81.40 points, or 0.78 percent at 10,558.64. Earlier, it had rallied as much as 104 points after falling as much as 63 points earlier in the session.

Gold-mining shares dropped as U.S. gold futures slid more than 2 percent.

Shares of Kinross Gold (K.TO) fell 4 percent to C$20.99, while Barrick Gold (ABX.TO) was off 1.7 percent at C$40.61.

$1=$1.11 Canadian Editing by Peter Galloway

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