May 14, 2009 / 9:22 PM / 10 years ago

CANADA STOCKS-Resource rally helps TSX break 3-day slide

* TSX closes up 1.44 percent at 9,849.20

* Resource sectors turn higher, gold and oil firm

* Consumer issues active: Canadian Tire, Gildan, Forzani (Adds details, quotes)

By Ka Yan Ng

TORONTO, May 14 (Reuters) - Toronto’s main stock index snapped a three-day slide on Thursday, climbing nearly 140 points as the big materials, energy and financials sectors led a broadbased rally.

The materials and energy groups began the session lower, spurred by soft commodity prices. But both eventually gained momentum to the upside, recovering a portion of Wednesday’s steep losses.

The energy sector finished ahead 1.52 percent as crude prices climbed on renewed economic optimism. [ID:nN14507104]

Materials gained 1.41 percent, backed by strength in gold in a mixed session. [ID:nLE725830]

“Golds were strong, gathered strength all day. They were one of the better performing groups,” said John Ing, president of Maison Placements Canada.

“Overall it’s just a strong day after yesterday’s correction.”

Ing added that Friday’s trading will likely be “constrained” as market players gear up for a long weekend with Victoria Day in Canada on Monday.

Financials rose 1.66 percent after retreating for three straight sessions in what analysts called a “consolidation” phase.

The strength was widespread across eight of the TSX’s 10 main sectors, though most of the influential movers were from the index’s big three groups.

Royal Bank of Canada (RY.TO) led the pack, up 2.64 percent at C$42.35, followed by Potash Corp of Saskatchewan POT.TO, which was up 4.56 percent at C$126.01. Suncor Energy (SU.TO) gained 2.79 percent to C$34.64.

The Toronto Stock Exchange S&P/TSX composite index.GSPTSE closed up 139.69 points, or 1.44 percent, at 9,849.20.

The rebound comes after the TSX posted its first three-day retreat in more than a month. Entering the session, the index was up about 30 percent on a run of weekly gains, after hitting a five-year low in March.

Some consumer stocks were active, triggered by a higher than expected profit at retailer Canadian Tire Corp (CTCa.TO) [ID:nN14481424] and a positive outlook from Gildan Activewear (GIL.TO). [ID:nBNG359860]

Canadian Tire rose 6 percent to C$48.20, while Gildan climbed 24.1 percent to C$15.65.

Meanwhile, Forzani Group FGL.TO rose 7.36 percent to C$14.01, as the sporting-goods retailer recommended that shareholders oppose a bid from a hedge fund attempting to nominate its own members to the board. [ID:nN14458991]

Francis Campeau, a broker at MF Global Canada in Montreal, said he was eyeing technical levels on the S&P/TSX 60 .TSE60, which fell 3.7 percent to 589.15 on Wednesday.

On Thursday, the S&P/60 finished at 598.66 points, up 1.61 percent.

“The big question is whether the break below ... 600 in Canada was a bull market correction or a confirmation of a bear market rally,” he said, also noting that the S&P 500 index .SPX was currently below the key 900 level.

“Right here, right now, it’s far from being obvious.”

$1=$1.17 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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