* Toronto index hits highest level since Nov. 12
* Early rally in oil prices credited with market rise
* TSX higher for sixth straight session (Adds details, comments)
By Frank Pingue
TORONTO, Jan 6 (Reuters) - Toronto’s main stock index backed away from the two-month highs it was nearing earlier on Tuesday as oil prices turned lower and took some of the steam out of the influential energy sector.
The energy sector rose nearly 4 percent early in the session as Israel’s military incursion into Gaza helped to heighten concerns about supply disruptions and lifted the price of crude to over $50 a barrel.
Then oil retreated to just above $48 a barrel and sapped some of the group’s momentum, leaving it with a gain of 1.4 percent by late morning.
“We came out of the gate pretty strong as the oil price was up over a buck, and that certainly pushed energy stocks a little higher,” said Bruce Latimer, a trader at Dundee Securities. “But the price of oil came back ... and some selling came in on the commodity itself.”
At 11:10 a.m. (1610 GMT), the S&P/TSX composite index .GSPTSE was up 39.45 points, or 0.42 percent, at 9,324.06, with six of its 10 main sectors in positive territory.
Earlier, the market had climbed to 9,412.75, its highest level since Nov. 12. That also helped to extend a string of gains that has seen the TSX rise as much as 13 percent in just over a week
The energy sector, which makes up about 22 percent of the overall index, kept the market afloat and helped offset pockets of weakness in other sectors.
Even with the turnaround in the price of oil, the commodity remained above the low of $32.40 it reached last month, and kept enough investors interested in energy shares.
A 1 percent drop in the materials group, home to shares of gold mining companies, put a brake on the market’s rise as the price of gold fell 2 percent to extend losses in the previous session.
$1=$1.18 Canadian Reporting by Frank Pingue; editing by Rob Wilson