March 17, 2011 / 2:50 PM / 8 years ago

CANADA STOCKS-TSX rallies with commodities after 3-day dive

*TSX up 129.61 points at 13,654.43

*Eight of index’s 10 sectors stronger

*Oil, copper, gold all firmer (Updates with details, quotes)

TORONTO, March 17 (Reuters) - Toronto’s main stock index jumped sharply higher on Thursday morning, buoyed by firmer commodities after falling for three straight sessions, but Japan’s nuclear crisis and clashes in the Middle East kept volumes thin.

The index’s three big sectors all rose. Energy was up 1.9 percent, materials up 1.2 percent, and financials 0.3 percent higher.

The powerhouse energy sector showed the strongest gains as as the price of crude rose by more than $3 as tensions in Saudi Arabia and Bahrain fueled fears of further supply disruption at the same time as investors weighed the impact of energy demand from quake-hit Japan. [O/R]

Suncor Energy (SU.TO) jumped 2 percent to C$42.88, and Canadian Natural Resources (CNQ.TO) rose 1.7 percent to C$46.71.

Developments at Japan’s Fukushima Daiichi nuclear plant remained a main source of worry. Japanese military helicopters dumped water on a reactor and a water cannon was also used to douse an overheating reactor but radiation levels at the plant remained high. [ID:nL3E7EH18S]

“This is probably a faded rally ... It’s trading off the reactor cooling down and there’s a feeling it’s kind of under control so that’s what gave the market a bid but the rally is still tenuous,” said Paul Gardner, partner and portfolio manager at Avenue Investment Management.

“Technically, we still look poor, so we may have an up day today but there might not be a lot of follow-through in the next couple days.”

Base-metal miners rallied 2.5 as the price of copper hit its highest level in more than a week. Teck Resources TCKb.TO advanced 4.1 percent to C$53.19. [MET/L]

At 10:21 a.m. (1421 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 129.61 points, or almost 1 percent, at 13,654.43. Eight of its 10 main groups were stronger.

Among weighty financials, Royal Bank of Canada (RY.TO) gained 0.5 percent to C$59.35, and Manulife Financial (MFC.TO) bounced up 1.5 percent to C$16.38.

Gardner said expectations of rebuilding in Japan will support the market, especially forest-product companies. “There’s been a pretty aggressive selloff and if you fix this nuclear problem, then you talk about rebuilding, which is generally good for the market,” he said.

“Certainly timber companies would benefit from that, especially Canadian timber companies because the Japanese like Douglas fir.”

Canfor Corp (CFP.TO) soared 5.5 percent to C$13.70, and International Forest IFPa.TO advanced 6.7 percent to C$7.00.

Gold-mining shares reversed earlier losses, rising 0.4 percent as bullion prices benefited from a weaker U.S. dollar. Goldcorp (G.TO) rose 1 percent to C$45.91 [GOL/]

Research In Motion RIM.TO jumped 1.3 percent to C$60.22 after the BlackBerry maker said on Wednesday it has big plans to make better use of its nerve center computers. [ID:nN16259058]

Lululemon Athletica LLL.TO sank 5.1 percent to C$74.74 after it posted a higher quarterly profit but said it was unable to meet soaring demand for its yoga- and active- wear in the current period. [ID:nN16138953]

$1=$0.98 Canadian Reporting by Claire Sibonney; editing by Peter Galloway

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