July 7, 2010 / 9:13 PM / 9 years ago

CANADA STOCKS-TSX flies higher on oil price, UTS deal

* TSX up 1.76 percent at 11,397.27

* All 10 main sectors end higher

* UTS soars after French oil major Total makes offer (Adds details, background, quotes)

By Ka Yan Ng

TORONTO, July 7 (Reuters) - Toronto’s main stock index surged on Wednesday as a bounce in oil prices and an offer by Total SA (TOTF.PA) to buy UTS Energy Corp UTS.TO led the index higher for a second straight session.

UTS shares jumped 63 percent to C$3.44 after French oil major Total agreed to buy UTS for C$1.5 billion in cash, twice the amount it offered for the Canadian oil sands developer 18 months ago. [ID:nSGE66609U].

“The bid for UTS by Total is something that has given investors some more confidence that the future of the oil sands is more intact,” said Michael Sprung, president of Sprung & Co. Investment Counsel.

As well, U.S. crude futures topped $74 a barrel, after six straight sessions of declines, helping send the energy group up 2.77 percent. Suncor Energy (SU.TO), the country’s biggest oil company, rose 4.1 percent to C$32.50, while Canadian Natural Resources (CNQ.TO) added 2.9 percent to C$35.82. [O/R]

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished up 197.10 points, or 1.76 percent, at 11,397.27.

All 10 main sectors advanced as the TSX added strongly to its gains in the second half of the session and closed less than one point below its intraday high.

Financials and materials, the other powerhouse sectors, pushed higher during the session as well, after the overall index had been beaten down in recent sessions and hit a eight-month closing low on Monday.

“Just a little bit of a relief rally after we’ve had such a negative tone for a while,” said Paul Taylor, chief investment officer at BMO Harris Investment Management.

“I think a lot of investors are doing some bottom-fishing here with some valuations that have come back significantly.”

The financials group, up 0.76 percent, was helped by a brighter outlook for banks in the United States and overseas as U.S. custodian bank State Street (STT.N) gave a bullish outlook and investors were optimistic that stress tests planned for European banks might not be as bad as initially feared. [ID:nN07140060] [ID:nLDE6661RE]

Among the big gainers in the financials group were Toronto-Dominion Bank (TD.TO), up 1.34 percent at $71.12, and Bank of Montreal (BMO.TO), ahead 1.2 percent at C$59.26.

The materials group, supported by firmer copper prices, rose 2.2 percent. Teck Resources TCKb.TO jumped 6.22 percent to C$33.65.

Junior miner New Gold (NGD.TO) fell 11.35 percent to C$5.39 after it said that a Mexican court had denied its appeal of a federal ruling that had revoked the environmental permit at its Cerro San Pedro mine. [ID:nSGE6660GO]

$1=$1.05 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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