April 20, 2011 / 8:59 PM / 8 years ago

CANADA STOCKS-Energy stocks help TSX rally to one week high

* TSX ends session up 160.65 points at 13,897.48

* Nine of 10 main sectors stronger (Updates with details, comments)

By John McCrank

TORONTO, April 20 (Reuters) - Toronto’s main stock index rallied to a one-week high on Wednesday, as surging oil prices gave a boost to energy stocks and a raft of solid U.S. earnings boosted investor sentiment.

The energy group rose 2.14 percent, spurred by a 2.9 percent jump in the price of U.S. crude oil above $111 a barrel. Oil gained on data that showed a steep drop in U.S. stockpiles. [ID:nWEN1498] [O/R]

Suncor Energy (SU.TO) gained 2.73 percent to C$42.51, Baytex Energy (BTE.TO) rose 2.03 percent to C$57.91, and Canadian Natural Resources (CNQ.TO) was up 2.41 percent to C$44.25.

Encana Corp (ECA.TO) had been down for much of the day after it delayed growth plans due to stubbornly weak natural gas prices. But even its stock managed to close up 0.29 percent. [ID:nN20166251]

“It’s probably a bit premature to assume commodity prices have peaked,” said Patricia Mohr, vice president, economics and commodity market specialist at Scotia Capital in Toronto. She said that demand in China would likely increase and the strengthening U.S. economy would add to supply pressures.

The materials group advanced 1.06 percent, led by miners such as First Quantum Minerals (FM.TO), up a hefty 6.73 percent to C$128.60, Inmet Mining IMN.TO, up 4.24 percent to C$70.05, and Teck Resources TCKb.TO up 4.24 percent to C$70.05.

Base-metals prices advanced, while gold surged to a record high above $1,500 an ounce, helped by a weak U.S. dollar and inflation fears. [MET/L] [GOL/]

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 160.65 points, or 1.17 percent, at 13,897.48. Nine of its 10 sectors main were stronger.

“The big news right now is inflation and stocks are traditionally a good hedge against inflation,” said Tim Burt, chief investment officer at Cardinal Capital Management Inc. in Winnipeg, Manitoba.

“Stocks are a better inflation hedge than gold,” said Burt.

A raft of data showing increasing inflation in major Asian economies like China and India were echoed in Latin America on Wednesday, with Brazilian prices nearing a government ceiling and Mexico’s yearly rate exceeding a key target.

The market’s gold subsector rose 0.87 percent, though several gold miners ended up in the red, including Yamana Gold (YRI.TO), down 1.21 percent to C$12.21 and Iamgold (IMG.TO), falling 3.14 percent to C$19.14.

Broader market sentiment was helped by solid corporate earnings in the United States from blue chips Intel Corp (INTC.O) and United Technologies Corp (UTX.N), as well as data that showed U.S. home resales rose more than expected in March. [.N]

Research In Motion RIM.TO rose 2.8 percent to C$51.96 after launching its PlayBook tablet computer on Tuesday. [ID:nN19146402]

$1=$0.95 Canadian Editing by Jeffrey Hodgson

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