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TORONTO (Reuters) - Toronto's main stock index was up more than 1 percent on Tuesday morning as heavily weighted energy and materials issues got a boost from higher commodity prices, and investor sentiment turned positive on better-than-expected data out of Europe and the United States.
Energy shares led the way, rising 2.89 percent as oil gained nearly $3 a barrel on supply fears spurred by protests in Kazakhstan and worries that supply from Iran could be hit by sanctions.
Canadian Natural Resources CNG.TO was the index's top gainer, rising 4.16 percent to C$36.58.
The materials sector was also higher, climbing 2.8 percent as spot gold rose above $1,600 an ounce and copper prices climbed on better-than-expected economic data out of Europe.
Shares of Barrick Gold (ABX.TO), the world's No.1 gold producer, rose 2.72 percent to C$47.57.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 171.56 points, or 1.49 percent, at 11,711.26 at 10:00 a.m.(1500 GMT).
U.S. housing starts hit a 1-1/2 year high in November, suggesting that the battered U.S. housing market was starting to recover.
Some analysts were skeptical that the U.S. housing data was actually a reflection of fundamental improvements in economic conditions, however.
"In my view the U.S. housing market is far from having stabilized," said Carlos Leitao, chief economist at Laurentian Bank Securities in Montreal. "I wouldn't be surprised if we see further price declines in 2012."
Also brightening market sentiment, German business sentiment rose sharply in December, according to Ifo, a Munich-based think-tank, underscoring the resilience of Europe's largest economy and casting a rare positive light on the euro zone.
Reporting by Julie Gordon; Editing by Peter Galloway