TSX rises as energy, materials shares show strength

TORONTO (Reuters) - Canada's main stock index closed modestly higher on Thursday, reversing earlier weakness on the back of higher energy and financial shares and a turnaround in mining stocks. The index's heavily weighted energy sector rose 0.73 percent despite crude oil prices that declined as fears eased that fighting in Iraq would spur export disruptions. Analysts have said a relaxation of tension in Iraq can be good for oil and gas shares as it reduces concern about a related slowdown in economic growth. Penn West Petroleum PWT.TO rose 2.0 percent to C$10.44, while Suncor Energy SU.TO climbed 1.5 percent to C$45.38. The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended the session up 56.09 points, or 0.37 percent, at 15,030.74. Eight of the 10 TSX subgroups ended the session higher. It was the second straight day of gains for the index, and followed Tuesday's sharp drop from near record-high levels. Rick Hutcheon, president of RKH Investments, said he expected the index to regain the lost ground. "I think ultimately it will (hit a new high). But I think we're not going to bolt through it, we're going to wander through it," he said. "I think we're rangebound until something kicks us out of it, but the general trend is higher." Financials rose 0.43 percent, led by Bank of Nova Scotia BNS.TO, which rose 0.7 percent to C$71.43. The mining-heavy materials sector rebounded from early weakness to end the session up 0.23 percent, led by First Quantum Minerals FM.TO, up 1.89 percent at C$22.51. (Reporting by Cameron French and Leah Schnurr; Editing by Peter Galloway)