TSX jumps on bank profits, resource gains
By Jon Cook
TORONTO (Reuters) - Canadian stocks rose on Thursday following a sharp selloff the previous session, encouraged by stronger-than-expected earnings from Canada's top two banks, surging oil prices, and upbeat economic data from China and the United States.
Royal Bank of Canada (RY.TO: Quote) and Toronto-Dominion Bank (TD.TO: Quote) pushed the index's financial sector up 1.1 percent after the banking heavyweights' earnings topped estimates and both raised their dividends.
Shares of RBC, the country's largest bank, shot up 2 percent to C$56.80, and No. 2 lender TD was up 1.4 percent at C$82.
Canadian financials have risen more than 7 percent this year, reversing a 7.5-percent loss in 2011.
"The banks look like they're definitely breaking out of a bit of a funk for the last year," said Mike Newton, portfolio manager at Macquarie Private Wealth Inc.
Investors overlooked lower net income numbers at RBC and TD and focused on the dividend increases. The interest boosted shares of banks that are still due to report, with Bank of Nova Scotia (BNS.TO: Quote) climbing 0.8 percent to C$53.79 and Canadian Imperial Bank of Commerce (CM.TO: Quote) up 0.4 percent to C$77.03.
"When you're only getting 1 percent in your money market and you can find a stock yielding 2 to 4 percent with the potential for capital gain, that's a bit of an aphrodisiac to get invested in the marketplace," said Irwin Michael, portfolio manager at ABC Funds.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 79.45 points, or 0.63 percent, at 12,723.46. Continued...