Energy shares lead TSX higher on central bank hopes

TORONTO (Reuters) - Canada's benchmark equity index gained ground on Thursday, led by energy stocks, after soft Chinese economic data kept alive talk that central bankers may ease monetary policy to stimulate growth.

Shares in Canadian oil and gas companies were lifted almost across the board as investors bet that slowing Chinese inflation would give the central bank of the world's second largest economy room to continue cutting interest rates or use other tools to try to spur growth.

"If there is one country that's going to move commodity markets, it's going to be China if you can get demand back on track," said Gareth Watson, vice president for investment management and research at Richardson GMP.

Shares in Canadian Natural Resources Ltd jumped 6.1 percent to C$31.37, playing the biggest role of any stock in leading the market higher.

Canadian Natural gained even though it reported a 19 percent fall in second-quarter net profit.

Independent oil producer Crescent Point Energy Corp also helped pull the index up with a 4 percent jump to C$42.03 after posting a 55 percent jump in profit and raising its production forecast for the year.

By 10:35 a.m. EDT (1435 GMT) the Toronto Stock Exchange's S&P/TSX composite index <.gsptse> was up 71.93 points, or 0.6 percent, at 11,852.97.

Watson said that action was also being anticipated from the U.S. and European central banks.

"The market is telling us they expect further steps to be taken in the near future," he said. "Whether they'll be effective is a completely different issue."

The Bank of Canada remains one of the only major central banks considering tightening policy, a view reiterated by Governor Mark Carney in interviews published on Wednesday.

Other stocks on the move after results included retailer Canadian Tire Corp Ltd , which rose 4.2 percent after reporting a higher profit.

Bombardier Inc was one of the heaviest weights on the index. Its shares fell 2.7 percent to C$3.66 as the train and plane maker's revenue dropped.

(Editing by Jeffrey Hodgson)

Source: http://news.yahoo.com/tsx-may-open-higher-central-banks-eyed-action-125608804--sector.html

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