TORONTO (Reuters) - The Toronto Stock Exchange's main index finished sharply higher, underpinned by record high oil prices and takeovers in the mining sector.

The price of oil jumped $1.67 to a record $93.53 a barrel as stormy weather disrupted supplies from Mexico while the US dollar weakened and Mideast tensions rose. Toronto's energy issues followed crude's lead, gaining 0.7 percent.

The materials sector, home to resource shares, was lifted by news that world number one producer Barrick Gold will buy Arizona Star Resource Corp in a cash deal worth C$773 million ($814 million).

Barrick gained 57 Canadian cents, or 1.4 percent, to C$41.99.

The sector also found support from the price of gold, which surged to its highest level in 28 years on the weak US dollar.

Spot gold rose as high as $794.40 an ounce. Toronto's gold mining subsector gained 0.9 percent, while the broader materials group was up 1.8 percent.

Elsewhere in the sector, Kinross Gold was up 61 Canadian cents, or 3.5 percent, at C$18.30.

In the heavyweight energy sector, Petro-Canada was up 78 Canadian cents, or 1.4 percent, at C$53.87, while Canadian Natural Resources rose C$1.51, or two percent, to C$78.53.

The S&P/TSX composite index closed up 130.92 points, or 0.92 percent, at 14,427.35 with seven of the TSX's 10 main groups finishing higher. It was the sixth straight session the index has finished up.

"It's a nice way to start the week," said Elvis Picardo, investment strategist at Northern Securities in Vancouver, British Columbia. "We have good, solid participation from the three major groups: commodities, financials and energies."

Financials, which account for about 30 percent of the market, moved higher as investors hoped for an interest rate cut by the US Federal Reserve later in the week.

"There's a section of the market that thinks that financials in general, not just Canadian financials, have been quite beaten down since mid-August," Picardo said.

He added that the rate hopes helped the market shake off some of the pessimism that has plagued it recently, as a cut will show that the Fed is prepared to do what it can to keep the US economy going.