By Cameron French
TORONTO (Reuters) - Toronto's main stock index ended higher on Thursday, rebounding from the previous day's sharp slide bolstered by a rise in energy shares, even though the Canadian market's underperformance versus comparable U.S. indices continued.
Rising oil prices and natural gas futures boosted energy stocks, as did an upgrade of Canadian Natural Resources (Toronto:CNQ.TO - News). But the momentum was seen largely as a rebound from the previous day's weakness, when the sector helped pull the TSX down by more than 1 percent from 19-month highs.
"Yesterday it was a bit of an anomaly ... and there is lighter trader volume this week, so I think we're seeing a rebound in those names today," said Jeff Bradacs, a portfolio manager at Manulife Asset Management.
Brokerage and investment banking firm Stifel raised its rating on Canadian Natural to "buy" from "hold" and said the company was well-positioned for the second half of 2013.
Weighing on the sector was Pacific Rubiales Energy Corp (Toronto:PRE.TO - News), which dropped 5.2 percent to C$23.40 after a Colombian arbitration tribunal on Wednesday ruled in favor of state-run oil company Ecopetrol in a dispute over the revenues generated by an oil field run by the companies.
The consumer staples subgroup was also strong, rising 0.68 percent on the back of Shopper's Drug Mart (Toronto:SC.TO - News), which rose 1.6 percent to C$42.71, and Alimentation Couche-Tard (ATDb.TO), which climbed 1.5 percent to C$56.04 after National Bank Financial raised its price target to C$58 from C$56.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) rose 55.80 points, or 0.44 percent, to 12,799.91, gaining ground late in the session. But once again it underperformed the U.S. S&P 500 (.SPX) and Dow Jones Industrial Indices (.DJI), which each rose just under 0.6 percent.
The TSX is up 2.9 percent this year, while the S&P has climbed 9.6 percent.
"Although in the last month and a half the TSX certainly has lagged, overall I think generally the market was quite ahead of fundamentals anyway and for us to be taking a pause in here is probably not a bad thing," said Michael Sprung, president of Sprung Investment Management.
"If anything, I think there's maybe more risk building in the United States market than what we have here," he added.
Four of the TSX's ten subgroups ended the session in the red, led by a 1.05 percent drop in info tech stocks.
BlackBerry (Toronto:BB.TO - News) weighed on the group, falling 3.5 percent to C$15.48, and giving back about half the gains of the previous session when the stock rose after the company said it had received an order for 1 million of its smartphones.
In individual company news, Quebecor Inc (QBRa.TO) shares fell 4.6 percent to C$43.80 after the media and telecommunications conglomerate reported a 89 percent fall in quarterly profit. The company also said that Chief Executive Pierre Karl Peladeau will step down.
(Editing by Diane Craft)