TSX edges higher on day, up 1.4 percent on week

Fri Jan 20, 2012 5:21pm EST
 
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By Jon Cook

TORONTO (Reuters) - Canadian stocks ended slightly higher on Friday as financial issues rose on increased optimism about Europe, but had their momentum slowed as signs of weakness in China's factory activity stoked demand worries.

News that Greece was closing in on an initial deal with private bond holders to avert a default by the debt-ravaged nation boosted market sentiment.

"Global investors just want to get the parameters of what the (Greek) private sector involvement is going to be," said Stephen Wood, chief investment strategist for North America at Russell Investments. "That allows the market to handicap contagion implications a bit better."

Despite scant exposure to risky European debt holdings compared with their global counterparts, Canadian financial issues still responded positively as a resolution to Greece's debt woes would have a stabilizing affect on the rest of the euro zone.

Financials climbed 1 percent, with Royal Bank of Canada (RY.TO: Quote) ahead 1.4 percent at C$53.85 while Toronto-Dominion Bank (TD.TO: Quote) was up 1.2 percent at C$79.15.

"The health of financials in North America is an improving one and the financial market in Europe is questionable," said Wood. "Canadian banks have weathered this in the last four years pretty well."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 16.41 points, or 0.1 percent, at 12,397.10. The TSX gained 1.4 percent for the week and reached its highest level since mid November.

China set the negative tone early after manufacturing data showed a lackluster start to the year by the world's top metals consumer.   Continued...