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TORONTO (Reuters) - Canadian stocks capped their best week in more than two months on Friday, led by mining and financial shares, as expectations central banks would act to shore up the world's economies offset soft domestic and Chinese data.
A weaker-than-expected reading of China's July exports rattled investors and hurt oil and metals prices.
But the troubling data was offset by hopes the Chinese central bank could move soon to ease credit policy.
"We're living under some kind of a dome where all this bad news just bounces right off us," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.
Eight of Canada's 10 main stock sectors were higher. The heavily weighted materials group, which includes miners, pushed the broader index higher, climbing 0.7 percent.
Gold miners led the way as bullion rose in anticipation the U.S. Federal Reserve and European Central Bank will take further steps to boost their economies. <GOL/>
Potash Corp (POT.TO), the world's top fertilizer company, climbed 1 percent to C$43.16 as corn futures set an all-time high after the U.S. government slashed the size of the crop in the world's top grain exporter. <GRA/>
Auto parts manufacturer Magna International (MG.TO) jumped 5 percent to C$43.90 a day after reporting a sharp rise in profit and announcing it would buy a controlling stake in an electric car business.
Canadian financials edged up 0.2 percent, led by Toronto-Dominion Bank (TD.TO), which rose 0.4 percent to C$79.33.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 32.76 points, or 0.3 percent, at 11,890.89. It was up 2 percent for the week, its biggest weekly percentage gain since late May.
However, trading was subdued and moves exaggerated due to the holiday-shortened week in Canada and generally weaker summer volumes, said John Kinsey, portfolio manager at Caldwell Securities Ltd.
"The volumes are about a third of what they normally are," he said. "It will likely be very quiet until after Labor Day."
Trading has been relatively light in August ahead of what is anticipated to be a busier September when traders return from summer holidays and central banks may swing into action.
"Equity markets are perhaps putting too much weight, too much emphasis on salvation by the central banks," said Carlos Leitao, chief economist at Laurentian Bank Securities in Montreal.
Energy stocks were the biggest drag on the index on Friday, dropping 0.4 percent, as oil prices fell on the disappointing China data. Weaker global oil demand forecasts from the International Energy Agency also weighed.
Major decliners included Canadian Natural Resources Ltd (CNQ.TO), down 1.4 percent to C$30.95, Crescent Point Energy (CPG.TO), which fell 3.1 percent to C$41.04, and Suncor Energy Inc (SU.TO), off 0.3 percent at C$31.78.
Also weighing on risk sentiment was domestic data on Friday that showed Canada's economy unexpectedly lost 30,400 jobs in July, indicating tepid growth that will likely keep Canada's central bank on the sidelines for longer.
However, Schwartz noted that while most major economies have slowed, they're still growing.
"If you eat four bowls of ice cream and now you're only eating three bowls of ice cream, you're still not losing weight."
Additional reporting by Alastair Sharp; Editing by Kenneth Barry