March 9, 2009 / 3:50 PM / 10 years ago

CANADA STOCKS-TSX up slightly in choppy morning action

* Energy shares keep TSX higher

* Financials, materials cap gains

* Index off 1 pct at open, then rebounds

By Frank Pingue

TORONTO, March 9 (Reuters) - Toronto’s main stock index held steady near the break-even level late Monday morning after a see-saw start to the session, with energy shares pushing it higher, and bank and materials shares dragging it down.

A turnaround in oil prices, helped by speculation that OPEC may cut output again at its Sunday meeting, sparked a rally in the weighty energy sector and helped offset weakness in every other sector on the the index.

Shares of Suncor Energy (SU.TO), the main driver behind the index’s rally, were up 7.3 percent at C$29.35, while Canadian Natural Resources (CNQ.TO) rose 4 percent to C$43.56.

“Energy stocks are looking good today and they have all come up from their lows in the last little while ... They are probably front-running the meeting as I guess most people are expecting another reduction in production,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.

But a 1.5 percent skid in the influential financial index and a 0.86 percent drop in the materials group ate away at the TSX’s gains.

At 11:25 a.m. (1525 GMT), the S&P/TSX composite index .GSPTSE was up 20.32 points, or 0.27 percent, at 7,611.79. It fell 1 percent at the open but then rebounded to a gain of more than 1.4 percent before sliding again.

Kinsey said recent dividend cuts at a number of U.S. banks weighed on sentiment for Canadian financials and did little to calm nagging fear about the outlook for global the global banking sector

In Britain, Lloyds Banking Group (LLOY.L) reached a rescue deal that will give the government a stake of up to 77 percent [ID:nL9208557]. That rattled equities overseas and carried into the North American session.

Shares of Royal Bank of Canada (RY.TO) were off 1.5 percent at C$28.95, while insurer Manulife Financial (MFC.TO) dropped 3.3 percent to C$9.32.

Among materials issues, gold miners retreated along with a fall in gold prices. Goldcorp (G.TO) shares fell 1.56 percent to C$37.21, while Barrick Gold (ABX.TO) dropped 1 percent to C$36.51.

$1=$1.30 Canadian Editing by Rob Wilson

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