May 27, 2009 / 2:56 PM / 10 years ago

CANADA STOCKS-TSX heads higher as oils outweigh gold, banks

* TSX up 26.60 points at 10,312.50

* Energy group up 2 pct, crude at six-month high

* Bank earnings remain main market focus (Updates mid-morning, adds analyst comment)

TORONTO, May 27 (Reuters) - Toronto’s main stock index rose moderately on Wednesday morning as a firmer oil price lifted the energy group.

A 2 percent rise in energy shares overcame declines in the heavily weighted financial and materials sectors.

The three groups make up about three-quarters of the main index’s weighting and the first hour of the session was highlighted by see-sawing action after the TSX notched its third-straight day of gains.

Energy shares were helped by a rising oil price, which reached a six-month high after OPEC’s biggest member, Saudi Arabia, said the global economy had strengthened enough to cope with oil at $75 to $80 a barrel. [ID:nSYD212068]

Energy issues were the top movers on the TSX, with EnCana (ECA.TO) leading the pack, up 1.8 percent at C$60.45. Suncor (SU.TO) rose 2.5 percent to C$37.52 and Petro Canada PCA.TO gained 3.1 percent to C$47.05.

“Today, it looks like it’s back to the energy commodity story,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

At 10:25 a.m. (1425 GMT), the S&P/TSX composite index .GSPTSE was up 26.60 points, or 0.26 percent, at 10,312.50, after a brief turn lower shortly after the open.

The heavyweight materials group was off 0.97 percent, with Barrick Gold (ABX.TO) retreating 1.6 percent to C$40.32, while Goldcorp (G.TO) dropped 1.3 percent to C$41.69. Gold prices held around $950 an ounce, coming under pressure as a firmer U.S. dollar diverted some investment interest from bullion.

Banks were also among the main movers to the down side, including Toronto Dominion Bank (TD.TO), Royal Bank of Canada (RY.TO), and Bank of Nova Scotia (BNS.TO).

Earnings from the big bank continue to be the focus this week after Bank of Montreal (BMO.TO) posted a stronger quarterly profit than expected on Tuesday and sparked a 4.6 percent rally in the financial sector. [ID:nN26473895]

Some of those gains were given up on Wednesday amid profit-taking, as regional bank Laurentian Bank of Canada (LB.TO) reported a lower than expected profit. [ID:nN25448091]

“(Financials) were up strong yesterday. They certainly hit off on the right tone, no doubt about that,” said Nakamoto.

“BMO has got a history of controlling loan losses and I’m wondering if the other banks will be as strong.”

The overall financials group was down 0.13 percent as investors prepared for the onslaught of four more bank earnings reports Thursday. (Reporting by Ka Yan Ng; editing by Rob Wilson)

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