TORONTO, June 13 (Reuters) - Rumors that ATI Technologies Inc. has been selected for a major contract by Microsoft Corp. helped push up the shares of the graphics chip maker on Friday, but analysts were not buying the rumor.

Shares of ATI rose 46 cents, or 5.8 percent, to close at $8.40 on Nasdaq. On the Toronto Stock Exchange, the stock finished 40 Canadian cents, or 3.7 percent, higher at C$11.18, while the broader information technology sector was down 2.4 percent

According to a computer games Web site, ATI is said to have been selected by the world's largest software maker to supply graphic technology for the still unannounced next generation Xbox console. The Web site says Microsoft will dump Nvidia Corp. because of its inability to work cohesively with the chip designer.