March 26, 2009 / 6:19 PM / 10 years ago

CANADA STOCKS-TSX extends gains, powered by energy group

* TSX extends gains, led by energy sector

* Financials turn higher

* Richelieu profit down, stock drops more than 6 pct (Updates figures, adds comment)

TORONTO, March 26 (Reuters) - Toronto’s main stock index rose more than 2 percent on Thursday, pulled higher by energy issues, which climbed with oil prices on optimism that government stimulus measures may be helping to jolt the global economy out of recession.

Oil and gas stocks that helped to power the TSX higher included Suncor Energy (SU.TO), up 4.3 percent at C$29.63 and EnCana (ECA.TO), ahead 3.3 percent at C$54.87.

The broader energy sector climbed 3 percent as the price of oil rose to near $54 a barrel as the stimulus hopes offset the impact of high oil inventories. [ID:nSP460455]

Quarterly results from electronics retailer Best Buy (BBY.N) beat forecasts, helping to boost optimism that consumer spending may be faring better than expected.

As well, U.S. economic growth and jobless claims data came in roughly as expected on Thursday, adding to the more buoyant investor mood. [ID:nN26447514]

“I think we were in such a dismal funk for such a while that good news is catching on and people are looking at the glass full rather than half empty,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

At 1:55 p.m. (1755 GMT), the S&P/TSX composite index .GSPTSE was up 201.32 points, or 2.3 percent, at 8,998.76, with eight of its 10 main groups higher. The rise followed two days in negative territory.

While recent economic news helped the TSX string together a healthy eight-day rise earlier this month, there are still questions whether the index has touched bottom yet.

“You have this big debate now from traditional fundamentalists and technicians as to whether we’ve seen the market lows,” said Paul Hand, managing director at RBC Capital Markets.

The resource-laden materials sector, home to mining and fertilizer companies, rose 2.1 percent with Potash Corp of Saskatchewan POT.TO up 4.4 percent at C$106.84.

The hefty financial sector moved higher after initially seesawing, with Manulife Financial (MFC.TO) leading the way, rising 3 percent to C$15.33.

In corporate news, Richelieu Hardware Ltd (RCH.TO) fell 6.2 percent to C$15.44 after the company said it plans to cut costs and freeze executive salaries as it reported a 34 percent drop in first-quarter earnings. [ID:nN26490186]

$1=$1.23 Canadian Reporting by Ka Yan Ng and Jennifer Kwan; editing by Rob Wilson

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