By Claire Sibonney
TORONTO, May 31 (Reuters) - Toronto's main stock index closed higher on Monday as firm commodity prices and robust economic growth data helped lift the index's resource and banking shares.
Canada's economy expanded at the fastest clip in more than a decade in the first quarter, with a hot housing market and a return of business investment helping to boost gross domestic product by 6.1 percent annually.
As well, oil rose above $74, sending the energy-loaded index up 0.5 percent.
Suncor Energy Inc, the country's largest oil producer, rose 1.3 percent to C$32.50, and natural gas major EnCana Corp surged 2.5 percent to C$33.24.
The index's economically sensitive financial sector, up 0.2 percent, recovered some ground lost last week when some of Canada's big banks reported results that missed high market expectations.
Bank of Nova Scotia, due to report quarterly results on Tuesday, added 0.5 percent to C$48.25.
'The market is expecting probably a continuation of that economic recovery ... it's definitely registering in the Canadian market,' said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management in Vancouver.
The Toronto Stock Exchange's S&P/TSX composite index closed 91.55 points, or 0.78 percent, higher at 11,762.99.
'Overall, when you look at the GDP numbers that certainly came as a bit of a surprise as stronger than most economists had forecast, and shows that we still have a fair amount of economic generation here,' said Fred Ketchen, director of equity trading at ScotiaMcLeod.
But market players cautioned that trading was light because of the U.S. Memorial Day holiday and because Monday is the last day of May.
Shares of heavily weighted fertilizer producer Potash Corp of Saskatchewan rose 2.6 percent to C$107.14 after the company's sales arm concluded a contract to supply potash to a subsidiary of China's Sinofert Holdings Ltd.
The market will track the much-anticipated Bank of Canada interest rate announcement on Tuesday and U.S. and Canadian jobs numbers later in the week.
The market has priced in overwhelming odds that the bank will announce a rate increase, making Canada the first Group of Seven country to raise rates since the global recession.
'If the central bank is confident in raising interest rates in the face of a little bit of uncertainty around the world, I think that would be very good for Canadian stocks,' said Zohny.
'If they did not increase rates I think the market would take that as a cautious approach.'
At the market close on Monday, the TSX was 3.7 percent lower for the month of May and only 0.1 percent higher for the the year. 'We spun our wheels,' Ketchen said.
'It's a very volatile month,' Zohny said. 'I think we saw a lot of Europe spill over into Canada as well as around the world ... a lot of risk came off the table.'
($1=$1.04 Canadian)
(Reporting by Claire Sibonney; editing by Peter Galloway) (claire.sibonney@reuters.com; +1 416 941 8142; ReutersMessaging: claire.sibonney.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TORONTO, May 31 (Reuters) - Toronto's main stock index closed higher on Monday as firm commodity prices and robust economic growth data helped lift the index's resource and banking shares.
Canada's economy expanded at the fastest clip in more than a decade in the first quarter, with a hot housing market and a return of business investment helping to boost gross domestic product by 6.1 percent annually.
As well, oil rose above $74, sending the energy-loaded index up 0.5 percent.
Suncor Energy Inc, the country's largest oil producer, rose 1.3 percent to C$32.50, and natural gas major EnCana Corp surged 2.5 percent to C$33.24.
The index's economically sensitive financial sector, up 0.2 percent, recovered some ground lost last week when some of Canada's big banks reported results that missed high market expectations.
Bank of Nova Scotia, due to report quarterly results on Tuesday, added 0.5 percent to C$48.25.
'The market is expecting probably a continuation of that economic recovery ... it's definitely registering in the Canadian market,' said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management in Vancouver.
The Toronto Stock Exchange's S&P/TSX composite index closed 91.55 points, or 0.78 percent, higher at 11,762.99.
'Overall, when you look at the GDP numbers that certainly came as a bit of a surprise as stronger than most economists had forecast, and shows that we still have a fair amount of economic generation here,' said Fred Ketchen, director of equity trading at ScotiaMcLeod.
But market players cautioned that trading was light because of the U.S. Memorial Day holiday and because Monday is the last day of May.
Shares of heavily weighted fertilizer producer Potash Corp of Saskatchewan rose 2.6 percent to C$107.14 after the company's sales arm concluded a contract to supply potash to a subsidiary of China's Sinofert Holdings Ltd.
The market will track the much-anticipated Bank of Canada interest rate announcement on Tuesday and U.S. and Canadian jobs numbers later in the week.
The market has priced in overwhelming odds that the bank will announce a rate increase, making Canada the first Group of Seven country to raise rates since the global recession.
'If the central bank is confident in raising interest rates in the face of a little bit of uncertainty around the world, I think that would be very good for Canadian stocks,' said Zohny.
'If they did not increase rates I think the market would take that as a cautious approach.'
At the market close on Monday, the TSX was 3.7 percent lower for the month of May and only 0.1 percent higher for the the year. 'We spun our wheels,' Ketchen said.
'It's a very volatile month,' Zohny said. 'I think we saw a lot of Europe spill over into Canada as well as around the world ... a lot of risk came off the table.'
($1=$1.04 Canadian)
(Reporting by Claire Sibonney; editing by Peter Galloway) (claire.sibonney@reuters.com; +1 416 941 8142; ReutersMessaging: claire.sibonney.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.