CANADA STOCKS-TSX edges higher, Europe worries persist
* TSX up 15.08 pts, or 0.1 pct, at 11,539.98 * Financial shares climb after Greek vote * Higher Spanish, Italian bond yields curb optimism By Jon Cook TORONTO, June 18 (Reuters) - Toronto's main stock index rose on Monday after a victory for Greece's pro-bailout parties lifted financial shares but gains were pared by investor worries about rising bond yields in Spain and Italy. Greek voters gave a majority to parties supporting the country's economic bailout on Sunday, easing worries about Greece being forced out of the euro zone and boosting risk assets. Nearly all of Canada's 10 main sectors were higher, led by the financial group, which climbed 0.1 percent. Gains were driven by Canada's major lenders, with Royal Bank of Canada rising 0.8 percent to C$51.63, Toronto-Dominion Bank up 0.4 percent to C$79.33, and Bank of Nova Scotia climbing 0.6 percent to C$52.30. With uncertainty persisting about Europe, Canadian investors were focusing on safer bets that produced healthy dividends, said Sid Mokhtari, market technician and director of institutional equity research for CIBC World Markets. "Money is definitely going after what's been very thematically important for both the U.S. and Canada and that's your yield market," said Sid Mokhtari, market technician and director, institutional equity research, CIBC World Markets. Canada's small defensive healthcare sector also rose 1.8 percent, led by drugmaker Valeant Pharmaceuticals International Inc, which jumped 4 percent to C$47.78. On Friday, Valeant said it will buy privately held drugmaker OraPharma for about $312 million, to enter the dental market. At 11:13 a.m. (1513 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 15.08 points, or 0.1 percent, at 11,539.98 after initially falling. However, the Greece-driven relief rally showed signs of fading, as investors worried about the far-larger economies of Spain and Italy. On Monday, Spanish bond yields hit a new euro-era high above 7.0 percent, a level considered unsustainable. Italian bond yields also jumped. "People are more concentrated on what's after Greece and now they're talking about the Spanish and Italian markets," said Mokhtari. "No one wants to make a directional bet, that's why volume is pretty tame and on the lighter side." Investors were also looking ahead to this week's Federal Reserve policy meeting, which starts on Tuesday, and the chances of fresh action to stimulate flagging growth. "Everyone is going to wait to see what the Fed says, if its going to extend Operation Twist in the U.S. or not," said Mokhtari. In other news, shares of Research in Motion Ltd slid 1.5 percent to C$11 after contract electronics manufacturer Celestica Inc said it will stop making products for the struggling BlackBerry maker, its largest customer, over the next three to six months as the BlackBerry maker shrinks its global supply base.
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