TSX rises to three-month high, led by energy and financial stocks

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose on Friday, marking a new three-month high as an oil rally and improved risk appetite helped drive gains in energy and financial stocks.

For the week, the index scored a 2.3 percent gain.

U.S. crude prices settled at $38.50 a barrel, up 1.74 percent, after the Paris-based International Energy Agency said the market may have hit its bottom. [O/R]

Investors also took a positive view of the European Central Bank's new stimulus package unveiled on Thursday.

"It's basically risk-on today globally," said Scott Guitard, a portfolio manager at Fiduciary Trust Canada.

"Overnight, investors have put on their analyst cap and determined that the grander (ECB) stimulus program may have enough horsepower to get things moving in Europe," he added.

Canadian Natural Resources (Toronto:CNQ.TO - News) rose 2.5 percent to C$36.11, while Cenovus Energy Inc (Toronto:CVE.TO - News) was up 4.7 percent at C$17.38.

The overall energy group rose 2.3 percent despite a 2.3 percent fall to C$3.42 for Canadian Energy Services & Technology (Toronto:CEU.TO - News). It reported a loss on lower revenue and forecasted that 2016 would be even more challenging.

The financials group advanced 1.4 percent, including a 3.5 percent gain for the shares of insurer Manulife Financial Corp (Toronto:MFC.TO - News) to C$18.88.

Other influential gainers included Canadian National Railway (Toronto:CNR.TO - News), which rose 1.5 percent to C$79.88, and Valeant Pharmaceutical International Inc (Toronto:VRX.TO - News), which was up 4.3 percent at C$92.12.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) closed up 142.86 points, or 1.07 percent, to 13,522.00 It touched its highest since Dec. 2 at 13,543.29.

Eight of the index's 10 main groups ended higher.

The index has rebounded 17 percent since hitting an almost 3-1/2-year low in January, supported by a recovery in crude oil prices and stabilization in global financial markets

"I think over the next 12 months the trend will continue to be upward," said Guitard, although "there is some room for a pullback" in the short term.

The shares of department store operator Hudson's Bay Co (Toronto:HBC.TO - News) rose 2.7 percent to C$17.77. It plans to invest 1 billion euros ($1.12 billion) in its German chain Kaufhof over the next five to seven years.

The materials group, which includes precious and base metals miners and fertilizer companies, fell 1.2 percent as gold miners pulled back from recent solid gains.

Barrick Gold Corp (Toronto:ABX.TO - News) was off 2.5 percent at C$18.45, while Goldcorp Inc (Toronto:G.TO - News) fell 1.7 percent to C$21.66.

The Canadian economy unexpectedly shed jobs last month.

(Additional reporting by Alastair Sharp; Editing by Nick Zieminski and James Dalgleish)