(Reuters) - UBS raised its 12-month target on the S&P/TSX composite index .GSPTSE, the Toronto Stock Exchange’s main index, to 16,400 from 15,000 as the outlook for higher oil prices has raised the index’s energy earnings.
“With more than a third of TSX earnings in energy, and including higher estimates in the materials sector for this year, TSX earnings are now expected to rise 27 percent this year and 20 percent in 2009,” UBS said in a note to clients.
UBS oil analyst Jan Stuart expects prices to remain near current levels, with West Texas Intermediate crude oil expected to average $113.50 a barrel this year and $120 a barrel in 2009.
“This has prompted energy earnings to soar 60 percent this year and another 27 percent in 2009,” UBS said.
Last week, UBS bank said Stuart lifted the UBS oil price forecast for U.S. crude by 32 percent to $115 a barrel and forecast the 2009 oil price at $120 a barrel, a 54 percent rise from its earlier forecast.
The index was trading down 1 percent at 14,650 points in afternoon trade on Friday.
Reporting by Bijoy Koyitty in Bangalore; Editing by Himani Sarkar, Bernard Orr