Published On: Sat, Jun 13th, 2009

TSX closes near 8-month high on energy rally

Toronto’s main stock index ended higher on Thursday as its weighty energy sector drew support from another rise in oil prices, helping the TSX reach its highest level in nearly eight months.

Shares of energy companies did much of the session’s heavy lifting as oil prices extended their three-day rally, topping $73 a barrel, on hopes for a recovery in world demand. [ID:nSIN191080]

That was enough to boost shares of EnCana Corp (ECA.TO) 1.8 percent to C$62.99, while Canadian Natural Resources (CNQ.TO) followed with a 2.3 percent gain to close at C$66.00. The energy sector as a whole climbed 1.9 percent.

The TSX’s latest move higher follows a pair of lackluster sessions where it straddled the break-even level. It is now up 43 percent from the five-year low it reached in March, which some experts say is too much, too soon.

“The market looks stretched, it looks overbought, it looks out of breath, but it just doesn’t seem to want to stop,” said Rick Hutcheon, president and chief operating officer at RKH Investments.

“What keeps it up is simply the amount of money that’s sitting on the sidelines that’s afraid of missing the ultimate rally.”

The S&P/TSX composite index .GSPTSE finished up 116.13 points, or 1.1 percent, at 10,714.11. Earlier in the session it rose 128 points to 10,726.01, which marked its highest level since Oct. 14.