January 21, 2009 / 10:36 PM / 10 years ago

CANADA STOCKS-Energy issues lead TSX to 3 percent gain

* TSX rebounds 250 points in volatile session

* Energy group leads way as oil price jumps

* All 10 of TSX’s main sectors advance

* Nova shares plunge on liquidity concerns (Adds details, official numbers, analyst comments)

By Natalie Armstrong

TORONTO, Jan 21 (Reuters) - Toronto’s main stock index finished almost 3 percent higher in a late-session rally on Wednesday as a jump in oil prices boosted energy shares.

The oil and gas sector gained 4.4 percent as oil jumped nearly 7 percent as OPEC supply cuts outweighed evidence that a deepening global slowdown would crush fuel demand. [ID:nSP402296]

Shares of Suncor Energy (SU.TO) soared 11.2 percent to C$24.58, reclaiming much of the previous day’s losses when it was the top moving decliner. EnCana (ECA.TO) rose 4.9 percent to C$55.24.

The financial sector also rebounded, climbing 4.3 percent with the session’s top mover, Manulife Financial (MFC.TO), rising 7.6 percent to end at C$21.63.

Royal Bank of Canada (RY.TO) advanced 4.2 percent to C$32.12.

The S&P/TSX composite index .GSPTSE ended up 252.96 points, or 2.97 percent, at 8,757.89 in a volatile session that reclaimed a chunk of Tuesday’s nearly 4 percent drop. All 10 sectors finished higher after being mixed earlier.

“Sellers are exhausted again,” said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.

“The reality is, we’re down at the low end of the trading range and that’s where the buyers have seemed to step up before.”

Earlier, the composite was down as much as 1.3 percent as nagging worries about global economy shook weighty financials while a turn lower in oil pulled down energy issues.

However, the index turned decidedly positive after midday as the price of oil charged higher.

“We have these small bounces but the trend still tends to be down as opposed to up,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier

“I don’t have faith that this movement up is going to carry forward for the next couple of weeks, because right now earnings are being released. IBM was good, but the vast majority have been awful and their outlook is quite poor.”

The day’s top decliner was Kinross Gold Corp (K.TO), which dropped 4.8 percent to C$22.00 as the price of gold fell and the company announced a share offering to bolster its cash position.

Shares of Nova Chemicals Corp NCX.TO, the index’s second biggest decliner, plunged 26.5 percent to C$4.45 after a report raised liquidity concerns about Canada’s largest manufacturer of raw plastics. After the close, Nova Chemicals said it continues to have full access to its credit facilities.

On Wall Street, U.S. stocks rebounded from a two-month low, after IBM Corp’s (IBM.N) surprisingly healthy earnings report fueling optimism in the technology sector.

The Dow Jones industrial average .DJI rose 279.01 points, or 3.51 percent, to 8,228.10 while the Nasdaq composite index .IXIC ended up 66.21 points, or 4.6 percent, at 1,507.07.

$1=$1.26 Canadian Reporting by Natalie Armstrong; editing by Rob Wilson

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