The Toronto Stock Exchange surged more than 300 points Monday, as violence in the Middle East sent energy stocks and oil prices soaring.
At closing, the TSX was up 326.74 points -- a gain of nearly four per cent - to finish at 8,637.29 points. It was the first trading day after a four-day Christmas break, and the start of the final week of 2008.
As Israel entered its third day of a military campaign against Hamas militants, killing hundreds of people in the Gaza Strip, the February crude contract in New York rose $2.31 to US$40.02 a barrel.
That drove up the TSX energy sector by 5.7 per cent.
"(Oil) has been up as high as just above $42 dollars. A lot of this is because of concern ...about uncertainty in the Gaza Strip created by these military strikes," BNN's Michael Kane told CTV's Canada AM earlier in the day.
Israel says the recent campaign is in response to the steady stream of rockets Hamas has fired into southern Israel.
Kane said the price of oil has also been driven by reports that China may begin to stockpile oil in order to take advantage of the current low prices, Kane said.
That phenomenon could have a positive affect on stock markets, and potentially help the TSX recover more of the 40 per cent in losses it has seen in the past year.
There have also been indications that OPEC member nations are moving to make good on plans to cut back production and tighten up supply by more than 2 million barrels per day, following a decision earlier in the month.
Oil prices peaked in July at $147.27 per barrel.
