Nov. 9 (Bloomberg) -- Canadian stocks advanced for a fifth day, led by commodity-linked companies and banks, as Tropical Storm Ida helped boost oil prices and the U.S. dollar neared a 15-month low against major world currencies.

Suncor Energy Inc., Canada’s largest energy company, rose 5.5 percent as oil topped $79 a barrel. Royal Bank of Canada, the country’s largest lender, climbed 2.2 percent as financials increased. Goldcorp Inc. jumped 4.6 percent as bullion surged to a record price.

“It doesn’t get much better than today for Canadian equities,” said Michael Sprung, who is responsible for C$60 million ($56.8 million) as a money manager at Sprung & Co. Investment Counsel Inc. in Toronto. “Investors all along have been desperately seeking good news, and whenever there is good news, no matter how minor, that seems to have caused a lift in the market.”

The Standard & Poor’s/TSX Composite Index added 236.46 points, or 2.1 percent, to 11,486.88.

The Canadian benchmark index has outgained the S&P 500 this year by 28 percent to 21 percent, as commodities have rallied on the promise of stronger demand and the return of inflation as an investor concern. Energy and raw-materials stocks make up 47 percent of the Canadian market by market value.

Last month, the S&P/TSX fell for the first time since February as U.S. consumer confidence and home sales missed economists’ forecasts.

“Investors have been reacting to both positive and negative news in a very, very exaggerated way,” Sprung said.

Worldwide Surge

Stocks surged around the world after U.K. Chancellor of the Exchequer Alistair Darling said his colleagues from the G-20 nations decided at a meeting of finance ministers to keep interest rates low and maintain record budget deficits until economic recoveries take hold.

The U.S. Dollar Index slid 1 percent as investors sought riskier and higher-yielding assets.

Oil rose 2.6 percent to $79.44 a barrel in New York as Tropical Storm Ida entered the Gulf of Mexico, forcing BP Plc and Chevron Corp. to cut output.

Suncor rose 5.5 percent, the most since May 8, to C$37.35, contributing the most to the S&P/TSX’s gain. EnCana Corp., which is spinning off its oil operations, advanced 2.7 percent to C$62.77. Oil and gas producer Talisman Energy Inc. climbed 3.9 percent to C$19.11.

Stimulus

Financial shares gained on signs governments would stick with economic stimulus. Royal Bank increased 2.2 percent to C$56.44. Toronto-Dominion Bank, Canada’s second-largest lender and the parent of TD Bank in the U.S., rallied 3.1 percent to C$66.59. Manulife Financial Corp., Canada’s biggest insurer, rose 2.4 percent to C$21.04.

“While in the U.S. people are still seeing the end of things getting worse, in Canada people are saying things are getting better,” said Todd Johnson, an associate portfolio manager at Winnipeg, Manitoba-based BCV Asset Management, which oversees C$125 million. “Profits will be rising and that is sending financial stocks higher.”

Gold gained 0.5 percent to $1,101.40 an ounce in New York as investors sought a hedge to the weakening U.S. dollar. Goldcorp, Canada’s second-largest gold producer, added 4.6 percent to C$46.49. Eldorado Gold Corp., which mines in South America, Asia and Europe, jumped 4.2 percent to a record C$13.86.

Lumber producer Canfor Corp. led the benchmark index with a 9.7 percent surge to C$6.87. The company gained on the extension of a tax credit for U.S. home buyers and speculation of an increased distribution at Canfor Pulp Income Fund, said analyst Paul Quinn of Royal Bank of Canada in an interview.

Greystar Resources Ltd., which produces bullion in Colombia, soared 21 percent to a 19-month high of C$6.40 after announcing favorable drilling results.

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net.

Last Updated: November 9, 2009 16:30 EST