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TORONTO, Dec 28 (Reuters) - The Toronto Stock Exchange’s main index was off to a strong start on Friday morning, in a broad advance prompted by gains in resource shares amid firm gold and oil prices.
The materials group led the advance, gaining 1.2 percent, while the price of gold climbed to a one-month high on weakness in the U.S. dollar and international political tensions.
Potash Corp of Saskatchewan POT.TO added C$1.45, or 1 percent, to C$144.44, extending Thursday’s advance.
The gold subsector rose 1.4 percent, with Barrick Gold (ABX.TO) up 90 Canadian cents, or 2.3 percent, at C$40.48.
The energy sector, the second largest on the index, was up 0.5 percent as oil advanced on a drop in U.S. fuel inventories and political uncertainty in Pakistan and Iraq.
The S&P/TSX composite index .GSPTSE was up 80.23 points, or 0.59 percent, at 13,755.80 with eight of the 10 main groups in positive territory shortly after the opening bell.
The heavyweight financial sector also helped lift the index, rising 0.6 percent after a report said U.S. and European banks planned to raise capital by selling assets to shore up their capital.
Volume on the market was expected to be light in the second-last day of trading for the year.
The wide up and down swings that have become the hallmark of the Toronto index recently are likely to continue into 2008, said Michael Sprung, president of Sprung & Co Investment Counsel.
“Going into the new year, the volatility we’ve seen, which is just reactive to day to day changes, whether they’re in commodity prices or interest rates, will continue to drive what we’ve seen as severe volatility, mainly perpetrated by momentum players at the edges of the market,” Sprung said.
“I think that this first part of next year is going to be pretty difficult to find any direction in the market with the overhanging concern of the problems in the credit market,” he added.
The lone sectors on the downside were tech and health care.
$1=$0.98 Canadian Reporting by Leah Schnurr; Editing by Rob Wilson