January 5, 2009 / 8:07 PM / 10 years ago

CANADA STOCKS-Oils, financials lead TSX higher

* Energy issues follow price of crude higher

* TD, National Bank announce preferred share issues

* Gold miners drag on materials group (Adds details)

TORONTO, Jan 5 (Reuters) - Toronto’s main stock index was up more than 1 percent on Monday afternoon, led higher by energy shares, which climbed along with oil prices, and on a rally by financials.

The oil and gas sector climbed 3.23 percent as the price of crude rose above $48 a barrel. EnCana and Suncor Energy were among the biggest movers. Suncor (SU.TO) shares jumped 6.7 percent to C$27.57, while EnCana (ECA.TO) was up 4.4 percent at C$62.38.

The financial group was up 2.7 percent, led by Manulife Financial (MFC.TO), the biggest mover on the overall index. The insurer rose 8.4 percent to C$22.74. It was joined by gains in Toronto-Dominion Bank (TD.TO) and National Bank of Canada (NA.TO), which both announced preferred share offerings. [ID:nN05350432]

“We also had some pretty good financings this morning. The yields on them are quite high,” said Steve Ibel, an institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

Investors were also hopeful that Canada’s finance minister and central bank chief were successful in prodding the country’s top bank executives to loosen up lending after they met on Monday. [ID:nN05384257]

But it was U.S. President-elect Barack Obama plans for $310 billion in tax cuts as part of a rescue package of up to $775 billion that was helping lift overall sentiment in the financials group, Ibel said.

At 2:45 p.m. (1745 GMT), the S&P/TSX composite index .GSPTSE was up 74.52 points, or 0.8 percent, at 9,308.63. Half of the index’s 10 main groups were higher.

The falling price of gold dragged the materials group down 2.4 percent but base metal miners helped offset retreating gold issues.

Shares of Barrick Gold Corp (ABX.TO), the biggest drag on the index, were down 4.7 percent at C$41.68, while Goldcorp (G.TO) shares fell 6.4 percent to C$35.65. (Reporting by Ka Yan Ng; editing by Rob Wilson)

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