December 12, 2008 / 5:23 PM / 10 years ago

CANADA STOCKS-TSX cuts losses on hope for U.S. automaker aid

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By Frank Pingue

TORONTO, Dec 12 (Reuters) - Toronto’s main stock index charged back from a near 300-point slide on Friday and was hovering near the break-even mark at midday on hope that aid for U.S. automakers could still come even though an earlier plan collapsed.

Signs on Friday that the White House and U.S Treasury may mount a last-ditch effort to aid the automakers boosted the index off the session low, which was also its lowest level in a week.

“The way the doom and gloomers were talking it looked like a 1,000-point (loss) day today and when that didn’t materialize, that was seen as a positive,” said Bruce Latimer, trader at Dundee Securities.

At 12:05 p.m. (1705 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was 8.28 points higher at 8,400.18, with two of its 10 sectors in positive territory.

Earlier, the key index tumbled 281.77 points as a package of measures to provide aid to U.S. automakers died in the Senate late Thursday after opposition from Republicans.

The materials group, home to some of the biggest base-metals and gold-mining companies in the world, led all sectors with a 2 percent rise and kept the market afloat as the price of gold rose.

Barrick Gold Corp (ABX.TO) shares were up 2.9 percent at C$39.03, while shares of mid-tier producer Agnico-Eagle (AEM.TO) rose 8.9 percent to C$48.35.

The main drag on the index was coming from energy stocks, which fell 3 percent as oil prices dropped 7 percent after the collapse of the $14 billion auto rescue package and as Goldman Sachs predicted oil could fall to $30 a barrel from current levels around $44.

Shares of EnCana Corp (ECA.TO) were down 3.3 percent at C$53.40, and Suncor Energy (SU.TO) shares dropped 5 percent to C$24.65.

$1=$1.25 Canadian Editing by Peter Galloway

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