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TSX bucks downtrend, rises as energy stocks bounce

Reuters
A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index gained on Thursday, interrupting a sustained down trend, as energy stocks surged and oil prices rebounded from near 12-year lows.

Canadian Natural Resources (Toronto:CNQ.TO - News), one of the country's biggest oil and gas producers, jumped 8.4 percent to C$24.82, while pipeline company Enbridge Inc (Toronto:ENB.TO - News) gained 8.3 percent to C$44.66. The overall group rose 5.2 percent.

"The big story is a pop back in energy," said John Stephenson, president at Stephenson & Company Capital Management. "Then (European Central Bank Governor) Mario Draghi was very positive on the likely actions of the ECB, so that was a big plus for markets, so as a result we have got a bit of relief in our otherwise downward trend."

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The ECB's Draghi hinted of additional stimulus measures as early as March, citing concerns over China and emerging markets, volatility in financial and commodity markets and geopolitical risks.

Canadian banks and consumer stocks also rose, while miners and railways weighed.

Potash Corp (Toronto:POT.TO - News) fell 3.3 percent to C$22.80, after the fertilizer producer said it may defer plans to build a new West Coast shipping terminal with partners Mosaic Co (NYSE:MOS - News) and Agrium Inc (Toronto:AGU.TO - News). Agrium shares lost 1.5 percent to C$123.52.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended up 192.75 points, or 1.63 percent, at 12,035.86.

Half of its 10 main groups were higher, with advancers outnumbering decliners by less than 3 to 1.

The index hit its lowest level since August 2012 on Wednesday and is down almost 10 percent since Christmas.

Depressed crude oil prices have weighed on the resource-linked market, including fears that Canadian banks will take a hit to profit in 2016, as more corporate loans sour, oil and gas capital raising dries up and job losses take a toll on banks' consumer arms.

Canadian Pacific Railway Ltd (Toronto:CP.TO - News) fell 0.9 percent to C$149.84, paring much sharper early losses after it missed profit expectations on lower freight volumes.

Bombardier (BBDb.TO) fell 9.2 percent to C$1.09 after United Airlines (NYSE:UAL - News) agreed to buy 40 small planes from Boeing Co, a blow for the Canadian plane and train maker, which has sought a major customer to give momentum to its fledgling CSeries jets.

Royal Bank of Canada (Toronto:RY.TO - News) advanced 1.8 percent to C$66.83 after British insurer Aviva (LSE:AV.L - News) said it would buy RBC's general insurance arm for C$582 million ($403 million).

(Additional reporting by Fergal Smith; Editing by W Simon and Chris Reese)