October 23, 2008 / 2:46 PM / 9 years ago

CANADA STOCKS-Oil prices, earnings lift Toronto index

* Volatile TSX index rebounds to climb 100 points

* Petro-Can, EnCana rise on stronger results, oil price

* Investors eye corporate outlook as recession fears weigh (Adds details)

TORONTO, Oct 23 (Reuters) - The Toronto Stock Exchange’s main index rose on Thursday morning as energy issues gained on higher oil prices and strong quarterly results from oil companies.

Energy shares rose 3.7 percent on the higher oil price as well as expectations of an OPEC supply cut [ID:nN23298924] and on surging quarterly profits at Petro-Canada PCA.TO [ID:nBNG372282] and EnCana ECA.TO [ID:nBNG274906].

Petro-Canada was up 6.1 percent at C$26.95, while EnCana rose 6.4 percent to C$54.

Shortly after 11:30 a.m. (1530 GMT), the S&P/TSX composite index .GSPTSE was up 107.49 points, or 1.2 percent, at 9,344.37. The index rose sharply at the open, turned briefly negative, and then moved higher again.

Seven of the index’s 10 main groups were higher, including strong gains by the mining-heavy materials group.

But the focus may turn from narrow corporate results to the broader outlook for companies as recession worries continue to cloud investors’ mood. The Bank of Canada said on Thursday the economy was teetering on the brink of recession. [ID:nN23418668]

A downturn in global markets during the financial crisis has put forecasts and budgets at risk in nearly all industries, and investor disappointment stemming from lowered forecasts could weigh further.

“Earnings have been more of a secondary issue because actual earnings are looking back and most people are already anticipating some downgrading in earnings anyway,” said Paul Hand, managing director at RBC Capital Markets.

“I don’t think the specific numbers are a big factor.”

Suncor Energy SU.TO slashed its 2009 capital spending by more than a third and pushed back completion of an upgrader [ID:nN23427017], while Shaw Communications SJRb.TO said it did not currently expect to invest in wireless operations during 2009. [ID:nN22384126]

The financials group eked out a small gain, up 0.4 percent, as the federal government said it would guarantee borrowing by the country’s banks. [ID:nN23310513] Some bank stocks were higher as the move was the latest in a string of global actions to shore up confidence in credit markets.

“The Canadian banking system needed something similar to remain competitive,” said Hand.

Canadian Imperial Bank of Commerce CM.TO was up 1.6 percent at C$54.90. But Bank of Nova Scotia BNS.TO was off 3.7 percent at C$39.58, as a few analyst cut their price targets for the bank. [ID:nN23297234]

$1=$1.26 Canadian Reporting by Ka Yan Ng and Jennifer Kwan; editing by Rob Wilson

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