November 28, 2008 / 10:48 PM / 10 years ago

CANADA STOCKS-TSX rises on optimism on U.S. stimulus

* Financials soar 11.8 percent, track U.S. stocks

* TSX up 13.7 pct for the week, biggest gain in decades

* Index fell 5 pct in November (Adds details)

By Jennifer Kwan

TORONTO, Nov 28 (Reuters) - Toronto’s main stock index rose for a sixth straight session and logged its biggest weekly rise in decades on Friday on hopes that U.S. stimulus efforts unveiled this week would help boost Canada’s main trading partner.

After adjusting more than 150 points higher minutes after the closing bell, the S&P/TSX composite index .GSPTSE ended the day up 516.85 points, or 5.9 percent, at 9,270.62.

The TSX was up 13.7 percent for the week, its biggest gain in about 30 years, but down 5 percent for the month.

The financial services sector surged 11.8 percent, drawing support from buoyant U.S. stocks. Heavily weighted Royal Bank of Canada (RY.TO) rose 11.1 percent to C$43.18, while Manulife Financial (MFC.TO) was up 18.4 percent at C$24.00.

The hope is that stimulus efforts this week in the United States — including an $800 billion lending facility by the Federal Reserve — could signal a sustained rally, said Andrew Pyle, wealth adviser with ScotiaMcLeod in Peterborough, Ontario.

“The market really believes, I think, that was an inflection point. That provided enough support, finally, for the financial market to start some sort of recovery process,” said Pyle. “There is a little more confidence in the U.S. financials.”

Other factors helping lift the market included end-of-month portfolio adjustments, bargain-hunting and thin volumes with U.S. markets open only a half day after being closed for Thanksgiving on Thursday, analysts said.

The oil and gas sector rebounded to end the day up 4.1 percent as the price of oil rose. EnCana Corp (ECA.TO) rose 6.2 percent to C$60.00

But Nexen NXY.TO, an oil company that rose sharply on Thursday on renewed takeover speculation, fell 2 percent to C$25.50.

The materials group climbed 3.2 percent even as metal prices softened.

Cameco Corp (CCO.TO) was up 2.3 percent to C$22.15. Earlier, it said it is suspending uranium hexafluoride production at its Port Hope, Ontario, plant until the second half of 2009, due to a contract dispute with its supplier of hydrofluoric acid. [ID:nN28440432]

Earlier, a negative tone in the markets was reinforced by investor concern that the U.S. economy may keep sputtering if consumers keep their wallets shut during the kickoff weekend for the Christmas shopping season.

That worry was shrugged off on growing expectation the market is trying to find a bottom.

“We will get by the heart, or the root cause, of the things that ail us, which is the credit financial crisis,” said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.

“As we look at the economic fallout from that, while it will be a long drawn-out recovery process ... there is value in stepping into the market selectively,” Taylor said.

On Wall Street, the U.S. stock market closed at 1 p.m. [ID:nN28447041] The Dow Jones industrial average .DJI rose 102.43 points, or 1.17 percent, at 8,829.04, while the Nasdaq Composite Index .IXIC ended up 3.47 points, or 0.23 percent, at 1,535.57. ($1=$1.24 Canadian) (Reporting by Jennifer Kwan)

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