TSX ends higher as hopes for Europe boost banks
By Alastair Sharp
TORONTO (Reuters) - Canada's benchmark stock index ended higher on Wednesday as hopes for aggressive bond-buying action from the European Central Bank boosted banking shares.
Three of the country's biggest banks jumped more than 1 percent each ahead of a crucial ECB meeting on Thursday when the central bank's president, Mario Draghi, is expected to announce strong steps to ease pressure on Spanish and Italian borrowing costs.
"There is optimism that Draghi in his speech tomorrow will announce a comprehensive plan where there will be measures to strengthen the Spanish banks and where bond yields will be bought at a certain level without quantifying them," said Michael Simpson, a senior portfolio manager at Sentry Select Capital Corp.
Simpson said Canadian bank stocks would be immediate beneficiaries of any strengthening of the European banking system, while improved growth prospects for the region would ultimately also lift resource stocks.
Canadian mining and energy stocks notched smaller gains, led by fertilizer company Potash Corp's (POT.TO: Quote) 1.8 percent rise.
Suncor Energy Inc SU.TO, the country's largest energy company, gained 0.7 percent to C$31.35 after it said on Tuesday that output at its oil sands operations increased in August compared to the previous month.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 48.44 points, or 0.41 percent, at 11,990.14.
The index gain reversed a slip since mid-August, when the benchmark index tested highs near 12,200. Continued...