December 15, 2008 / 4:39 PM / 10 years ago

CANADA STOCKS-TSX rises with oil prices ahead of OPEC

* Oil briefly rises above $50 a barrel ahead of OPEC meet

* Gold, most base metals firmer; materials up 5.2 pct

* Teck up 12.5 pct, says will temporary shut zinc mine

* Ottawa may assist forestry, mining sectors (Adds quote, details)

By Jennifer Kwan

TORONTO, Dec 15 (Reuters) - Toronto’s main stock index edged higher on Monday morning as oil prices rose on expectations that OPEC will agree on deep supply cuts this week to prop up prices, and as firmer metals prices boosted mining shares.

Heavily weighted stocks that moved higher included Suncor Energy (SU.TO), up 4.7 percent at C$26.25, Canadian Natural Resources (CNQ.TO), up 4.9 percent at C$48.20, and EnCana (ECA.TO), which was 2 percent higher at C$56.01.

The energy sector rose 2.7 percent as oil briefly rose above $50 a barrel on expectations OPEC will agree to hefty production cuts, while a weaker U.S. dollar also helped boost oil. [ID:nSP382169]

“From an oil producer’s standpoint, the point that they’re likely to cutback in production is a good thing because at the moment ... we have slowing global growth and slowing demand,” said Bob Gorman, chief portfolio strategist at TD Waterhouse.

“This would reduce supply side in a period of slack demand.”

At 11:10 a.m. (1610 GMT), the S&P/TSX composite index .GSPTSE was up 22.88 points, or 0.27 percent, at 8,538.33, with three of its 10 main groups higher. Earlier, the index briefly turned negative before rising again.

The resource-laden materials group rose 5.2 percent as gold pushed higher as the U.S. dollar weakened [ID:nL1449620], while base metals were mostly higher. [ID:nLF132376]

Also boosting materials was news at the weekend that Canada will consider special aid to the forestry, mining and other industries in the federal budget due in late January. However, the auto sector remains Ottawa’s the top priority. [ID:nN14465292]

“If North American governments are going to be spending money on infrastructure ... that’s obviously going to a positive for the suppliers of these materials,” said Bruce Latimer, trader at Dundee Securities.

First Quantum Minerals (FM.TO) rose 4.7 percent to C$17.78 and Teck Cominco TCKb.TO, the most heavily traded stock, soared 12.5 percent to C$6.13.

Earlier, Teck announced the temporary shutdown of its Pend Oreille zinc mine, citing reduced demand and persistent weakness in zinc prices. [ID:nBNG91937]

The financial services group capped the broader market gains and were down 2.6 percent. There did not appear to be any specific headline news related to the sector’s moves, Gorman said.

“Higher oil prices are a negative in the States and might put a little pressure on the U.S. economy that it doesn’t need at this point and that may be reflected in the financials,” he said.

Financials could also be lower ahead of results expected this week from U.S. heavyweights Goldman Sachs (GS.N) and Morgan Stanley (MS.N), added Latimer.

Manulife Financial (MFC.TO) fell 4.3 percent to C$20.33, while Bank of Nova Scotia (BNS.TO) dropped 2.4 percent to C$30.16. ($1=$1.24 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)

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