TSX ends higher on optimism ahead of EU summit

Fri Oct 21, 2011 4:36pm EDT
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By Claire Sibonney

TORONTO (Reuters) - Toronto's main stock index pushed higher on Friday on fragile optimism that European leaders would make progress in resolving the euro zone's debt crisis over the next few days.

Nine of the TSX's 10 main sectors were stronger, led by energy and financial issues. Among the top gainers, Canadian Natural Resources (CNQ.TO: Quote) jumped 3.8 percent to C$33.66, Royal Bank of Canada (RY.TO: Quote) climbed 0.95 percent to C$48.04 and Toronto-Dominion Bank (TD.TO: Quote) added 1.1 percent to C$74.50.

"The shorts are covering so that they'll be flat for the weekend, just in case. That would be the prudent thing to do," said John Kinsey, portfolio manager at Caldwell Securities.

Hurdles remain in resolving the euro zone debt crisis, with European leaders scheduled to hold a summit this weekend. While important differences still separate major players France and Germany, investors took it as a positive that their leaders set a target date of Wednesday for reaching a solution.

"The focus has been ... whether or not Greece is going to default, which most people feel they will, what's going to happen to the French banks, what's going to happen to the European Union itself. So until that's resolved, this nervousness isn't going to go away," added Kinsey.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 119.16 points, or 1.01 percent, at 11,949.49. The telecoms sector was the day's only decliner, slipping 0.2 percent.

The TSX was down 1.1 percent for the week.

Talk of more stimulus by the Federal Reserve also provided market support as two top Fed officials argued earlier this week that the U.S. central bank should consider resuming large-scale mortgage bond purchases.   Continued...

<p>People walk by a Bay Street sign inside the financial district in Toronto October 10, 2008. REUTERS/Mark Blinch</p>