* Oil price retreats, pressures oil and gas sector
* Oilexco top loser and most traded; unit faces insolvency
* Labopharm up 47 pct; FDA approves pain drug Ryzolt
TORONTO, Dec 31 (Reuters) - Toronto’s main stock index was modestly higher at midday on Wednesday, but was under pressure as a soft crude price weighed on energy issues and offset gains by other sectors.
The Toronto Stock Exchange’s oil and gas group was off 0.7 percent as the price of crude held around $39 a barrel. The energy sector has fallen about 40 percent this year, tracking the price of crude, which is headed for a drop of more than 60 percent in 2008.
Oilexco OIL.TO was the most traded and biggest percentage loss leader, down 76 percent at 21.5 Canadian cents, as the oil and gas exploration company said its British unit faced insolvency. [ID:nLV536038]
At 11:50 a.m. (1650 GMT), the S&P/TSX composite index .GSPTSE was up 0.4 percent, or 32.85 points, at 8,863.57. Volume was light, with the trading week shortened by the New Year’s Day holiday on Thursday, which also exaggerated moves.
Still, after two days of triple-digit gains, the TSX may be able to eke out another advance to finish its roller-coaster year on a high note, despite the wobbly oil prices.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed on Tuesday at its highest level in more than four weeks in a broad-based rally. But it is still down about 36 percent this year.
Eight of the index’s 10 main groups were higher on Wednesday, with modest gains in the healthcare, financial, telecom and industrial sectors. The materials group was able to shrug off early weakness brought on by softer gold prices and edged into positive territory. The utilities group was slightly lower at midday.
In company news, Labopharm DDS.TO gained 47 percent to C$2.39 after it said it won its first U.S. regulatory approval for the once-daily chronic pain drug Ryzolt. [ID:nN31303720]
There were no Canadian economic numbers to help give direction on Wednesday. But in the United States, the number of workers filing new claims for jobless benefits fell more than than expected last week, although seasonal factors were likely behind the unexpectedly upbeat news.
The health of the slumping global economy is at the forefront of the market’s focus heading into the new year. Market observers are looking ahead to reduced turbulence from the financial crisis and hoping the economy will bounce back in the second half of 2009.
“The economic numbers will be worse, but the market numbers will start to look a lot better,” said Andrew Pyle, wealth advisor at ScotiaMcLeod in Peterborough, Ontario, pointing to hopes of improved credit markets, the effect of a new U.S. administration, and less volatility overall.
“It’s not out of the question to see the TSX putting on 20 percent in the first six months of the year. The trick will be what happens when we get to these thresholds,” Pyle said.
“That will be the interesting feature of 2009: whether investors will take the money and run or stay with the market.” (Reporting by Ka Yan Ng; editing by Rob Wilson)