Oils, gold nudge TSX to 32-month high

TORONTO: Toronto's main stock index reached its highest level in 32 months on Friday as intensified fighting in Libya boosted commodity prices, supporting the index's powerhouse energy and gold-mining shares.

Canadian Natural Resources surged 3.6 percent to C$49.70, while Suncor Energy jumped almost 2 percent to C$46.39. The index's energy sector gained 1.5 percent.

US crude oil futures rose for the third day in four as fierce fighting between loyalists to Libya's Muammar Gaddafi and rebels seeking to oust him from power raised more fears of supply disruptions.

The market has been watching the widespread unrest in North Africa and the Middle East for any signs that Saudi Arabia, the leading OPEC oil producer, could be affected.

"You see the real dichotomy between the Canadian and US markets, one more favourably impacted by commodities than the other," said Bob Gorman, chief portfolio strategist at TD Waterhouse, noting that there was a big selloff on US stock markets on Friday despite a solid US jobs report.

"The fear is that the increase in oil (prices) will cut into discretionary expenditures by consumers and that will in turn hurt all other elements of the economy," he said.

The Toronto Stock Exchange's S&P/TSX composite index ended up 38.05 points, or 0.3 percent, at 14,252.77, its highest closing level since June 2008. It ended the week up 1.4 percent.

In the United States, the Dow Jones industrial average was down 88.32 points, or 0.72 percent, at 12,169.88.

Only three of the TSX's 10 main sectors advanced on Friday, however: energy, healthcare and the materials group, home to miners.

Bullion rose above $1,430 an ounce, while silver surged 3 percent to a 31-year high as soaring oil prices and growing unrest in Libya prompted investors to pile into safe havens.

Precious metal shares gained 0.7 percent as Goldcorp rose 1.9 percent to C$48.70, while Barrick Gold was up 0.6 percent at C$51.40.

Silver Wheaton rallied 2.7 percent to C$43.64 after declaring its first dividend, while its quarterly profit beat analysts' estimates, lifted by higher gold prices.

"I think the same factors are still in play," said Rick Hutcheon, president and chief operating officer at RKH Investments, noting the continuing influence of the unrest in the Arab world on commodity prices and resource stocks.

Precious metals were also supported by expectations the US Federal Reserve would hold off on monetary tightening despite the healthy US jobs data.

US employers hired workers at the fastest pace in nine months in February and the jobless rate slipped to a nearly two-year low of 8.9 percent, signaling the economy is finally kicking into a higher gear.

Shares of Inmet Mining, which sank 7.4 percent to C$64.00, were among the biggest losers on the Toronto Stock Exchange, after the government of Panama announced plans to repeal a recent law that allowed foreign-government investment in mines.

SNC-Lavalin Group was down 0.4 percent at C$55.67, despite posting a higher quarterly profit and raising its dividend on Friday, as the Libyan crisis prompted a flat earnings outlook after at least six straight years of profit growth.

TD's Gorman said he still expects high single-digit growth on the TSX this year, but said the market is vulnerable to a pause from its recent extended rise.

"We've come over the past several months a long way in a brief period and the normal pattern is two steps forward and one step back, so any kind of retracement here would not at all be surprising," he said.

The index's financial sector was 0.2 percent weaker after a sharp gain in the previous session, while base metal miners were down 0.8 percent, tracking a fall in copper prices.