February 5, 2009 / 5:01 AM / 9 years ago

TSX rises as resources show strength

TORONTO (Reuters) - Toronto’s main stock index closed higher for a third straight session on Thursday in a broad rally led by strength in the key energy and materials groups, which rose on higher commodity prices.

<p>A general view of the TSX (Toronto Stock Exchange) Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch</p>

Materials, home to mining and fertilizer companies, rose 4.2 percent and led the index higher. Among heavily weighted gainers were miner Barrick Gold ABX.TO, up 4.2 percent at C$47.65, and fertilizer producer Potash Corp of Saskatchewan POT.TO, the top net gainer, which rose 8.7 percent to C$106.10.

The oil and gas group rose 1.9 percent as the price of crude settled higher at $41.17 a barrel on hopes for a U.S. stimulus plan. EnCana Corp ECA.TO was up 2.8 percent at C$55.70.

Also helping the index higher was the big financial services sector, which fought back from a 1.6 percent drop to finish the day up 1.8 percent, in part on optimism over a possible plan to shore up the ailing U.S. banking sector. Royal Bank of Canada RY.TO rose 2 percent to C$31.24.

Mining stocks were higher despite softness in base metals prices, which could be a sign that investors are pricing in the prospect of recovery, said Bob Gorman, chief portfolio strategist at TD Waterhouse.

“I do think you have some nibbling there,” he said. “It’s a combination of the supply response and people looking ahead.”

The S&P/TSX composite index .GSPTSE closed up 167.89 points, or 1.93 percent, at 8,860.98, with nine of its 10 main groups higher. Earlier, it dropped nearly 1 percent.

The lone sector in the red was utilities, down 0.3 percent.

Husky Energy HSE.TO, Canada’s No. 2 oil producer and refiner, fell 1.8 percent to C$29.40 after it reported lower quarterly results and chopped its dividend.

Auto-parts maker Magna International MGa.TO and plane and train maker Bombardier BBDb.TO were among several Canadian companies to announce layoffs.

Bombardier was down 4.6 percent at C$3.55 after it said it plans to cut more than 1,300 jobs as it braces for a 10 percent drop in business jet orders.

Magna rose 3.1 percent at C$36.87 after it said it would shut a plant in Syracuse, New York, which will ultimately eliminate 1,400 jobs.

Elsewhere, Certicom Corp CIC.TO said Research In Motion’s RIM.TO C$3-a-share sweetened takeover offer for the electronic security company is a superior bid to a previous bid from VeriSign Inc VRSN.O.

Certicom rose 1.3 percent to C$3.20, while RIM rose 1.22 percent to C$69.94.

Also, the Ontario Securities Commission approved a settlement with RIM executives on Thursday, in which they will repay tens of millions of dollars in a case related to stock-option allegations dating back to 1996.

($1=$1.23 Canadian)

Reporting by Jennifer Kwan; editing by Peter Galloway

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