CANADA STOCKS-TSX hits 3-week high on stimulus hopes
* TSX up 89.74 pts, or 0.8 pct, at 11,729.49 * Index at highest level since July 6 * Financial, energy shares lead gains * Hopes of ECB, Fed stimulus moves boost markets * Progress Energy Resources up 12 pct on takeover bid By Jon Cook TORONTO, July 27 (Reuters) - Canada's main stock index touched a three-week high on Friday, led by financial and energy shares, as risk sentiment was boosted by fresh hopes that major central banks in the U.S. and Europe will move to help the struggling global economy. The markets received additional support as the leaders of France and Germany said they are "determined to do everything to protect the euro zone." The joint statement echoed comments one day earlier by European Central Bank President Mario Draghi. "The spotlight is now back on Europe," said Carlos Leitao, chief economist at Laurentian Bank Securities. "I suspect the ECB will come up with some concrete measures and stocks are expecting that and pricing that in." Market expectations are high for another round of asset purchases when the ECB and the U.S. Federal Reserve hold separate meetings next week. "If that's the case it will be removing the really bad outcome of a financial collapse," Leitao added. The news perked up Canada's financial services sector, which rose 1.1 percent to lead the broader index higher. Gains were led by the country's top lenders, with Royal Bank of Canada up 0.8 percent at C$51.27, Bank of Nova Scotia rising 1 percent to C$51.78 and Toronto-Dominion Bank up 0.8 percent at C$78.96. The heavyweight oil and gas group climbed 1.3 percent as U.S. crude rose on hopes the Fed would respond with more stimulus. Progress Energy Resources Corp led energy gains, soaring more than 12 percent to C$22.63 after the Canadian natural gas producer said Malaysia's state-owned oil company Petronas has agreed to raise its offer to buy the company by 8 percent. Also supporting the sector's rise was Encana Corp, up 2.9 percent at C$20.94, and ARC Resources Ltd, which jumped more than 5 percent to C$25.61. TransCanada Corp shares edged up 0.7 percent to C$45.13, after Canada's biggest pipeline company said on Friday it received the final permit for its $2.3 billion Gulf Coast pipeline project. The news came at the same time as TransCanada reported a 23 percent fall in second-quarter profit on low natural gas prices. Around 11 a.m. EDT (1500 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 89.74 points, or 0.8 percent, at 11,729.49. The index was at its highest level since hitting 11,750.83 on July 6. Markets largely shrugged off U.S. data on Friday that showed America's economic growth slowed in the second quarter as consumers spent at their most sluggish pace in a year. While the figure was better than investors' worse fears it was still weak enough to potentially push the Fed closer to pumping more money into the economy. "It's not good, but at least it's what was expected," said Leitao. "There were some lingering bears that were expecting the number would be weaker than that."
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