TSX rally pushes on with aid of banks, miners

By Alastair Sharp TORONTO (Reuters) - Canada's main stock index notched its fourth straight day of gains on Friday, with the heavily weighted financials and materials sectors leading the way as investors sought value after a bleak couple of months. The index had slipped below 14,000 for the first time since mid-January last week, as investors fretted about slumping oil prices and slowing Chinese demand for commodities. It fell 0.6 percent in July, after a 3 percent decline in June. But banking stocks shook off those fears, coupled with short bets that a stretched housing market could hurt them, gaining 0.4 percent. "The whole 'shorting Canada' is usually a short-term phenomena, because let's face it, our financial sector has been a great place to be invested over the long term," said Julie Brough, vice president at Morgan Meighen & Associates. Royal Bank of Canada rose 0.7 percent to C$76.27, and Canadian Imperial Bank of Commerce gained 0.9 percent to C$93.36. The Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> added 3.3 percent on the week, closing up 85.66 points, or 0.60 percent, at 14,468.44. The rise came despite losses in oil and gas stocks, which were hurt by a drop in crude prices after output numbers showed OPEC producers were pumping near record levels into an already oversupplied market. [O/R] ARC Resources Ltd lost 3.7 percent to C$19.57, and Crescent Point Energy Corp fell 1.9 percent to C$19.81. U.S. crude fell 3.6 percent to $46.79 a barrel, while Brent lost 3 percent to $51.70. [O/R] Solid results helped pipeline operators, however, with Enbridge Inc up 1.3 percent at C$57.01 and TransCanada Corp adding 0.9 percent to C$50.83. "You'll get some trading rallies, but it's going to be very hard to create a sustained period of strength in the energy sector," Brough said. The mining-heavy materials group gained 2.8 percent, with shares of Goldcorp Inc jumping 6 percent to C$17.45 and Agrium Inc adding 2.2 percent to C$133.80. "We've really taken a beating here in Toronto in the last little while," said Rick Hutcheon, president of RKH Investments. "People are beginning to troll for stocks that appear to have some lasting long-term structural value, good management. ... At some stage, things fall to a point at which value starts to surface and we may be there." Gildan Activewear was the most influential loser, falling 7.6 percent to C$42.18 after the clothing maker's quarterly results fell short of expectations. (Additional reporting by Solarina Ho; Editing by Peter Galloway and Jonathan Oatis)