TSX nears one-week high on RBC results, U.S. hopes
TORONTO (Reuters) - Canada's main stock index hit its highest level of the week on Thursday as financial shares rose on Royal Bank of Canada's (RY.TO: Quote) strong quarterly earnings, and as optimism increased that a deal will be reached to avert the U.S. fiscal crisis.
Financials were up 0.8 percent, with RBC rising 0.5 percent to C$58.61. Canada's biggest bank reported a 22 percent jump in fourth-quarter profit on higher fixed-income trading revenue and steady loan growth.
Shares of other banks rose on optimism about the strength of the sector as the quarterly earnings season for banks continues.
The market was also supported by hopes that a deal would be reached to avert the U.S. fiscal crisis and positive housing data from the United States, Canada's biggest trading partner. <MKTS/GLOB>
"It is a broad risk rally, fueled primarily by greater optimism on the U.S. fiscal (crisis). The market is sensing signs of progress on the negotiations," said Fergal Smith, managing market strategist at Action Economics.
However, trading was choppy on conflicting comments from Washington on the progress of negotiations on averting the "fiscal cliff": $600 billion in tax hikes and spending cuts that analysts warn could push the U.S. economy back into recession.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 62.52 points, or 0.51 percent, at 12,202.85. Earlier in the session, the index hit 12,227.52, its highest level since November 23. All the 10 main sectors on the index traded higher. Energy shares climbed 0.5 percent and materials edged up 0.1 percent.
Portfolio managers and investment strategists say the combination of healthy Canadian bank earnings and some encouraging global economic data could help the Toronto index extend gains further before the end of the year. Continued...