March 10, 2009 / 2:38 PM / 10 years ago

CANADA STOCKS-TSX rallies as oil, banks gain

* TSX up 2.33 percent at 7,743.07,

* Financials up 6.7 pct, helped by Citigroup

* Iamgold to issue at least C$300 mln in common stock (Adds details, quote)

By Jennifer Kwan

TORONTO, March 10 (Reuters) - Toronto’s main stock index climbed sharply on Tuesday morning as the resource-laden market got a lift from higher oil prices and financials were supported by strength in U.S. banking stocks.

U.S. financial stocks rose after Citigroup Inc’s (C.N) chief executive provided a reassuring view about the company’s performance. [ID:nLA390055] Analysts said that in turn helped fuel a rally in the TSX financial sector, which rose 6.7 percent.

“If Citigroup is representative of the global banking system, this suggests that earnings are stronger than the market expects, and valuations are compelling,” said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.

“If we ever get the whiff that in fact that the earnings space of the banks is stable, there’s a huge value.”

At 10:14 a.m. (1414 GMT), the S&P/TSX composite index .GSPTSE was up 176.13 points, or 2.33 percent, at 7,743.07, with eight of its 10 main groups higher.

The energy sector rose 2.9 percent as oil climbed to around $48 a barrel ahead of a meeting in Vienna on March 15 of the Organization of the Petroleum Exporting Countries to decide whether to cut production further in an attempt to support oil prices. [ID:nLA242113]

Royal Bank of Canada (RY.TO) was up 7.9 percent at C$31.06, and EnCana Corp (ECA.TO) rose 1.2 percent at C$49.19.

Potash Corp of Saskatchewan POT.TO rose 5 percent to C$94.55, while Bank of Nova Scotia (BNS.TO) was up 5.9 percent at C$27.06.

Materials fell 2.5 percent, pressured by gold miners as the price of bullion sagged. Goldcorp (G.TO) sank 5.3 percent to C$34.61 and Barrick Gold (ABX.TO) fell 4.9 percent to C$34.47.

Iamgold (IMG.TO) said on Tuesday it will issue at least C$300 million in common stock, and use the proceeds to develop its recently acquired Essakane gold project in Burkina Faso. Iamgold, earlier halted, was down 9.3 percent at C$8.55.

$1=$1.28 Canadian Reporting by Jennifer Kwan; Editing by Peter Galloway

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