April 28, 2008 / 2:56 PM / 11 years ago

UPDATE 1-Toronto stocks rise amid investor optimism

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TORONTO, April 28 (Reuters) - Toronto stocks rose on Monday as energy shares benefited from record oil prices and financial shares shrugged off a series of analyst downgrades, raising optimism that most of the recent worries were in the past.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 115.37, or 0.8 percent, at 14,219.24.

Eight of the TSX index’s 10 main groups were higher, including energy shares, which rose 1.3 percent and the financial group, which was up 0.9 percent.

“It seems that at least part of what is pushing the Canadian market higher is a greater comfort that the various things that people have been worrying about — solid growth and negative performance from the financials — aren’t as severe as a few weeks ago,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis.

“Investors are becoming increasingly comfortable that we have seen most of the bad news.”

Warne pointed to the financials sector, which saw a string of analyst downgrades earlier on Monday, as proof.

Citigroup (C.N) knocked Royal Bank of Canada (RY.TO) down to “sell” from “hold,” while RBC analysts cut Bank of Nova Scotia (BNS.TO) to “underperform” from “sector perform.”

Scotiabank was up 27 Canadian cents at C$48.52, while Royal Bank of Canada, the country’s biggest bank, slipped 11 Canadian cents to C$47.98.

Energy shares got a boost as the price for U.S. crude oil CLc1 hit another record high near $120 a barrel amid supply disruptions in Nigeria and Scotland.

The sector was also lifted by takeover activity that saw French oil major Total (TOTF.PA) offer to buy Canada’s Synenco Energy Inc SYN.TO for about C$480 million. Synenco rose C$1.24 to C$9.03.

Canadian Natural Resources (CNQ.TO) added C$1.50 to C$87.06 and Suncor Energy (SU.TO) rose C$1.38 to C$118.65.

The broader gains were tempered by a 0.3 percent fall in the materials group as investors took profits in fertilizer shares, despite firm prices for soft commodities.

Potash Corp POT.TO dropped C$7.24 to C$203.16 and Agrium AGU.TO slipped C$3.332 to C$86.98.

$1=$1.02 Canadian Reporting by Scott Anderson; Editing by Bernadette Baum

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