March 12, 2009 / 8:32 PM / 10 years ago

CANADA STOCKS-TSX surges to highest close in 3 weeks

* Index closes 3.39 percent higher at 8,282.27

* Financials rally on upbeat U.S. bank news

* Energy issues buoyed by higher oil prices (Adds details, comments and official numbers)

By Frank Pingue

TORONTO, March 12 (Reuters) - Toronto’s key stock index surged to its highest close in more than three weeks on Thursday as Canadian bank shares got a lift after another U.S. bank said it started the year with a profit.

Weighty energy shares also played a major role in lifting the resource-heavy index to a third straight triple-digit gain, rising on an 11 percent jump in oil prices.

But it was the financials index that paced the index after Bank of America Chief Executive Kenneth Lewis said the bank was profitable in January and February, which echoed statements by Citigroup and JP Morgan executives in the two previous sessions. [ID:nN12368897]

Shares of insurer Manulife Financial (MFC.TO), the main contributor to the index’s rally, rose 13 percent to C$12.70, while Royal Bank of Canada (RY.TO) shares were up 4 percent at C$35.00.

Toronto’s key index has rallied 9.5 percent over the past three sessions and some analysts said that even if it does retreat soon, it will not pierce the more than five-year low it touched late last week.

“So we’re fairly close to a top here for the next day or two, but even if we do have a pullback in the next week or so, the lows should be a little higher,” said Levente Mady, broker at MF Global Canada, in Vancouver, British Columbia.

The S&P/TSX composite index .GSPTSE ended the session up 271.25 points, or 3.39 percent, at 8,282.27, which marked its highest closing level since Feb. 17.

$1=$1.28 Canadian Editing by Peter Galloway

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