June 6, 2008 / 1:21 PM / 11 years ago

Toronto stocks seen testing high on rising oil

*Oil and other commodities are expected to lift TSX

*North America jobs data proves slightly disappointing

*TSX index expected to test record intraday high

TORONTO, June 6 (Reuters) - The Toronto Stock Exchange’s main index was set to rise again on Friday, brushing off data showing a fifth straight month of U.S. job losses and hitching its fortunes on bullish oil and other hot commodities.

Following its biggest one-day gain since March, the resource-heavy Canadian benchmark could ride Thursday afternoon’s momentum to a record intrday high.

Oil surged for a second straight day, still bullish after the signs the European Central Bank may raise interest rates this year, and after an Israeli minister said an attack on Iranian nuclear sites looked “unavoidable.” See: [nSP280973]

Higher European rates would hit the U.S. dollar, which typically moves inversely to crude oil, while an attack on Iran would intensify supply concerns in the oil-rich Middle East.

TSX resource shares, which pushed the index nearly 2 percent higher on Thursday, could also get a lift from firm gas, gold and base metal prices such as aluminum and copper.

Meanwhile, Canadian job growth slowed more than expected last month in the biggest loss of full-time jobs since June 2006. A jump in part-time work helped the unemployment rate hold steady, but the data may spook stock investors looking for stable job growth. For details, see: [nN06309467]

In the United States, more jobs were shed in May than expected, and the unemployment rate rose to 5.5 percent from 5 percent, putting pressure on U.S. stock markets. See: [nN05349665]

“Regardless of what happens in the U.S. market, the TSX has a mind of its own — and we may be hitting new highs today,” said Francis Campeau, broker at MF Global Canada in Montreal.

The TSX financial sector, which has been flat the last month, may get a jolt after a court approved a restructuring plan for Canada’s asset-backed commercial paper (ABCP) market, which emerged as the epicenter of the country’s credit woes last summer.

If the court decision survives appeal, investors stuck with frozen commercial paper will get new notes or a full refund. For details, see: [nN05407469]

The S&P/TSX composite index .GSPTSE starts the day at 14,982.91 after jumping 292.45 points in the previous session. It is about 145 points off its record intraday high, set mid-May.

$1=$1.02 Canadian Reporting by Jonathan Spicer

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