July 11, 2008 / 3:17 PM / 11 years ago

UPDATE 1-Toronto stocks rise on oil surge, gold strength

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*TSX boosted by spike in oil to record near $147

*Materials sector rises on strength in gold price

*Financials slump as credit crunch worries persist

TORONTO, July 11 (Reuters) - The Toronto Stock Exchange’s main index was higher at midmorning on Friday, pulled up by a record high oil price and rising gold prices.

Oil and gas shares rose 1.7 percent as U.S. crude spiked to nearly $147 a barrel amid mounting fears over supplies from Iran, Nigeria and Brazil.

“It’s screaming here,” said Rob Moss, oil and gas analyst at Acumen Capital Partners, in Calgary, Alberta. “(Oil stocks were) a bit oversold in the last week because of that quick, sudden meltdown in oil prices.

“Of course, the market seems to oversell some of the high fliers, but they quickly come back when things change, so that’s what is driving the energy side of the TSX.”

The S&P/TSX composite index .GSPTSE was up 73.55 points, or 0.5 percent, at 13,817.43. Overall, seven of the benchmark’s 10 main groups were lower.

Talisman Energy TLM.TO was up 34 Canadian cents, or 1.7 percent, at C$20.44, while EnCana Corp (ECA.TO) was up 39 Canadian cents, or 0.5 percent, to C$84.04.

The mining-heavy materials group also provided a big boost, up 2.9 percent, as the price of gold rose on the rally in oil and a weaker U.S. dollar.

Kinross Gold (K.TO) was up C$1.04, or 4.6 percent, to C$23.72, while Goldcorp (G.TO) jumped $3, or 6.5 percent, to C$49.34.

The key financial sector was down 1.6 percent as worries over the persistent credit crisis gripped the market, triggered by concerns over the stability of Fannie Mae FNM.N and Freddie Mac FRE.N, the largest U.S. providers of mortgage funding.

Royal Bank slipped C$1.07, or 2.5 percent, to C$42.55.

Shares of Canwest Global Communications Corp CGS.TO were up 29 Canadian cents, or 14.4 percent at C$2.31 after the company reported a quarterly loss on Friday, but a 15-percent rise in revenue.

$1=$1.01 Canadian Reporting by Jennifer Kwan; Editing by Peter Galloway

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