June 9, 2008 / 3:06 PM / 11 years ago

UPDATE 1-Toronto stocks up as lower oil soothes growth worries

(Adds details, comments)

*Decline in oil offers reprieve to markets

*Resource shares lead rise on TSX

*Housing starts up more than expected

By Jonathan Spicer

TORONTO, June 9 (Reuters) - The Toronto Stock Exchange’s main index rose on Monday morning as resource shares charged higher, and a decline in oil prices helped ease worries over the impact of costly energy on economic growth.

The number of housing starts rose more than expected last month, underpinning optimism on the resilience of the Canadian economy amid a global credit crisis. For details, see: [nN09456243]

The price of U.S. light crude oil — which has rattled world markets with its recent jump — eased more than 2 percent, giving a boost to North American markets and driving the resource-heavy TSX toward the record high it touched midway through the previous session.

“In a weak commodity market, you don’t expect to see the Canadian equity market as strong as it is,” said Paul Taylor, chief investment officer at BMO Harris Investment Management.

“It just looks like a market that wants to go higher and trade in symphony with the S&P 500 and the Dow Jones (in the United States).”

Toronto’s S&P/TSX composite index .GSPTSE was up 90.90 points, or 0.6 percent, at 15,060.45. The energy sector added 1.3 percent and the materials sector added 1.2 percent.

Fertilizer producer Potash Corp of Saskatchewan POT.TO advanced C$7.64 to C$228.44, while oil and gas producer EnCana (ECA.TO) was up C$1.35 at C$95.75.

Investors may have been looking for value after recent retreats in gold and most base metal companies, along with oil.

Falling energy prices also soothed recent concerns over the effect that higher fuel costs will have on corporate profits and economic growth.

Imperial Oil (IMO.TO) climbed 77 Canadian cents to C$61.70 after it received government clearance to go ahead with its C$8-billion ($7.8-billion) Kearl oil sands project. For details, see: [nN06297252]

On the downside, Research In Motion RIM.TO, the BlackBerry maker, took a hit ahead of rival Apple’s (AAPL.O) widely expected announcement on its new iPhone later on Monday. RIM’s stock was off 96 Canadian cents at C$133.25. For details, see: [nN09458843]

Six of the TSX’s 10 main sectors dipped, including telecoms and industrials, off 0.8 percent and 0.5 percent respectively.

Bombardier (BBDb.TO) was off 38 Canadian cents at C$8.44 after JP Morgan cut the plane- and train-maker’s rating earlier on Monday.

$1=$1.02 Canadian Reporting by Jonathan Spicer; Editing by Bernadette Baum

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