Hefty gains for energy companies and financial firms led an upward trend on the Toronto Stock Exchange on Monday, lifting the benchmark index nearly 300 points.

The S&P/TSX composite index closed at 8,440.87, up 285.48 points, or 3.5%.

The energy group soared 7.1% after oil futures in New York surged 9.2%. Crude for January delivery rose US$4.57 to end at US$54.50 a barrel on the New York Mercantile Exchange.

Oil company gains were led by Suncor Energy Inc., up 11.3% to $22.95 and Talisman Energy Inc., up 9.5% to $10.06.

Other gainers were Canadian Natural Resources Ltd., up 8.15% to $45.00 and Nexen Inc., which rose 9.5% to $18.51.

The surge in oil prices helped lift the Canadian dollar by more than US2.5¢ to US81.00¢.

Financial companies rallied 4.7% despite more grim expectations for fourth quarter financial results among the big banks.

Shares of Royal Bank of Canada had gained $2.52, or 6.9% to $39.00 by Monday’s close, despite the bank’s announcement that it would report losses from the financial market meltdown. RBC announced that it expects fourth-quarter profits of $1.1 billion, down 15% from a year earlier, thanks to $360 million in one-time, after-tax charges.

Manulife Financial Corp. rallied 7.1% to $19.75 and TD Bank Financial Group rose 3.9% to $42.90.

The materials group shed 0.5%, as big gains by some mining companies were offset by losses by others.

First Quantum Minerals Ltd. gained 14.8% to $17.00 and Goldcorp Inc. rose 1.55% to $31.52.

Shares of junior miner NovaGold Resources Inc. suffered a steep drop after it announced problems raising financing and the suspension of operations at its Rock Creek gold mine project. The shares plunged 67% to close at $0.72.

Potash Corp. shares lost $5.07, or 6.5%, to end the day at $72.69.

Gold for December delivery rose US$27.70, or 3.5%, to close at US$819.50 an ounce on the Comex division of the New York Mercantile Exchange, the highest closing level since Oct. 15.

The sub-gold index rose 1.5%.

Shares of telecommunications giant BCE Inc. surged 9.8% on news of the massive U.S. government bailout of Citigroup, since the bank is one group financing of BCE’s buyout. BCE shares closed at $37.94.

Junior companies posted gains of their own, with the S&P/TSX Venture index rising 18.95 points, or 2.7% to close at 723.12.

South of the border, stocks enjoyed a similar rally on news that president-elect Barack Obama and his economic team were putting together a plan for economic recovery.

The Dow Jones industrial average closed at 8,443.39, up 396.97 points, or 4.9%. The Nasdaq composite added 87.67 points to 1,472.02 and the S&P 500 index climbed 51.78 points to 851.81.

IE