June 16, 2009 / 2:34 PM / 10 years ago

CANADA STOCKS-Stronger commodities drive TSX higher

* Toronto index rises 1.32 percent to 10,532.22

* Energy, materials shares rise with commodities prices

* Air Canada shares up 13.8 percent (Adds details, quote)

By Jennifer Kwan

TORONTO, June 16 (Reuters) - Toronto’s main stock index was firmly in the black on Tuesday morning as commodity prices rose on a weaker U.S. dollar, lighting a fire under the resource-laden stock market after it fell sharply the previous session.

The market sectors that were hit hardest in Monday’s 2.4 percent selloff rebounded on Tuesday as the U.S. dollar sank after comments from Russia suggested a need for a global reserve currency other than the greenback [ID:nN16351801].

The dollar’s weakness helped to push the price of oil CLc1 above $72 a barrel, while gold and base metals prices also rose.

The TSX index’s energy sector climbed 1.5 percent, while its mining-heavy materials group rose 2.2 percent. Oil company Canadian Natural Resources (CNQ.TO) was up 1 percent at C$63.04, and miner Goldcorp (G.TO) climbed 3.4 percent to C$39.62.

Economic reports, particularly U.S. housing and permits data, also supported the market, said Steve Ibel, institutional equities trader at Beacon Securities in Halifax, Nova Scotia.

U.S. housing starts and permits surged in May from record lows, while producer prices rose at a slower pace, adding to hope for economic recovery. [ID:nN16262919]

As well, a survey of German consumer confidence helped set a positive tone for the day. [ID:nSP384449]

“German consumer confidence was at a three-year high so that helped Europe, which helped New York and Toronto,” he added.

At 10:06 a.m. (1406 GMT), the S&P/TSX composite index .GSPTSE was up 137.44 points, or 1.32 percent, at 10,532.22, with nine of its 10 main groups higher. The health care group sagged 0.2 percent.

Shares of Research In Motion RIM.TO RIMM.O rose 3.1 percent to C$93.74 ahead of earnings results due this week [ID:nN15212529] and after the company said it is adding another smartphone to its BlackBerry lineup as it aims to win market share among both executives and mainstream users. [ID:nN15191386]

Air Canada ACa.TO shot up 13.8 percent to C$1.65 after the cash-strapped airline reached an agreement overnight with its remaining unions on delaying funding a deep pension shortfall.

$1=$1.13 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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