Roundup: Spiking energy prices send Canadian stocks higher

Canada's main stock market in Toronto continued the momentum to rise on Friday over surging international oil prices.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index gained 353.72 points, or 2.94 percent, to close at 12,389.58 points. Seven of the TSX index's eight main sectors went up.

Both the U.S. WTI oil and Brent crude soared over 9 percent in hope of stimulus from Eurozone. The European Central Bank (ECB) kept its key interest rates at record low levels on Thursday and suggested more stimulus in March to lift weak inflation.

However, economists remain watchful on the elusive oil prices. "The root causes that drove oil lower including oversupply in the global markets are all still in place, I would fully expect that we will see further pressure on the oil price in the coming weeks," said Michael J Smith, a Toronto currency expert at AFEX, a global non-bank provider of foreign currency services.

But for Friday, the upbeat crude prices helped boost TSX's energy group with a 5.64 percent advance. Calgary-based Baytex Energy Corp. soared 15.00 percent to 2.76 Canadian dollars a share, Suncor Energy Inc. added 5.28 percent to 31.33 dollars a share, and Canadian Natural Resources Limited increased 5.00 percent to 26.06 dollars a share.

Heavyweight financial stocks also posted a 3.09 percent increase, with Royal Bank of Canada adding 3.76 percent, Toronto-Dominion Bank up 2.99 percent and insurer Manulife Financial up 2.46 percent.

Canada's inflation rate rose to 1.6 percent in December year on year as food prices surged, Statistics Canada data showed Friday, suggesting the impact from the lower Canadian dollar was being felt.

The annual average increase in the Consumer Price Index (CPI) was 1.1 percent. This increase followed gains of 2.0 percent in 2014 and 0.9 percent in 2013.

Statistics Canada also reported that following flat sales in October, retail sales rose 1.7 percent in November to 44.3 billion Canadian dollars. The agency attributes much of the gain to higher sales at new car dealers. With the exception of gasoline stations, all sub-sectors showed an increase in sales, representing 90 percent of retail trade.

"On Wednesday the Bank of Canada said the risks to inflation are balanced but if inflation starts to rise then they will not be able to cut interest rates and that will lead to a stronger Canadian dollar," Smith said.

The Canadian dollar was traded higher at 0.7067 U.S. dollar, compared with Thursday's closing rate of 0.7003 U.S. dollar. Enditem