TORONTO -- Two of Canada's most valuable companies have helped lift the Toronto stock market above its previous record high, set 10 months ago just before the credit crunch took the life out of many investments.
But some economists suggest the gains could quickly wash away.
Both Research In Motion (TSX:RIM), the maker of the famed BlackBerry portable device, and oil and gas giant EnCana Corp. (TSX:ECA) drove the market skyward Monday.
The two stocks were heavily traded, with RIM shares up eight per cent and EnCana ahead six per cent. Their combined weight pushed the TSX to 14,654.15 in the afternoon, above a high of 14,625.76 set last July.
It was the third -- and only successful -- attempt the Toronto stock market has made at returning to the heights it left when the U.S. supbrime mortgage mess surfaced. Last Thursday, the TSX just missed the benchmark despite a record-high closing price for crude oil.
The increase will likely evaporate somewhat if the two companies can't sustain their charge as the week progresses, said Fred Ketchen, a manager of equity trading at Scotia Capital.
"We're going to give back some of these gains somewhere along the way," Ketchen said.
"But if I keep looking out, I don't see the demand for energy backing off any time soon."
Much of the momentum on the TSX has been caused by strength in resource stocks. The energy sector has climbed 40 per cent since January while the price for crude oil rose above US$125.
Investors have been turning to commodities stocks as a reliable investment alternative to international financial institutions, whose results have been bruised by the credit crisis.
"People were extremely nervous so they pulled in their horns, and they took their money out of risky investments," said Bob Tebbutt, vice-president risk management at Peregrine Financial Group Canada.
"When people are nervous they automatically flock to things that are real -- for example they flock to gold. It's a risk place that they can put their money in and know that they're theoretically going to get it back fairly easily."
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