Banks drive TSX to two-week high as data brightens mood

Tue Aug 13, 2013 5:08pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index touched a two-week high on Tuesday, lifted by positive economic signals as well as comments by a U.S. Federal Reserve official that data was too mixed for the Fed to detail an exit strategy from its stimulus program.

Figures showed U.S. retail sales rose in July at the fastest pace in seven months, and that German analyst and investor sentiment rose more than expected in August.

But U.S. economic performance is too mixed for Fed policymakers to lay out a detailed path for reducing and eventually halting their asset-purchasing program next month, Atlanta Fed President Dennis Lockhart said on Tuesday.

Financial stocks benefited from the economic optimism and had the biggest positive influence on the index as investor sentiment brightened. The group has climbed close to 10 percent since hitting a low in April, and expectations have been building for the bank earnings season later this month.

"I do see some constructive activity on the banks," said Keith G. Richards, portfolio manager and technical analyst at ValueTrend Wealth Management. "They're starting to look a little bit more bullish."

"If you do see the banks dip in the next month or two, there can be a buying opportunity," he added.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 47.92 points, or 0.38 percent, at 12,642.19, after reaching 12,655.79, its highest level since July 30.

Six of the 10 main sectors on the index were higher.   Continued...

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch