TSX rises on signs of financial stability
By Leah Schnurr
TORONTO (Reuters) - The Toronto Stock Exchange's main index drove higher on Tuesday as banking issues were buoyed by signs of greater stability in financial markets.
The banking sector took its cue from news south of the border, where Lehman Brothers Holdings Inc LEH.N said it had raised $4 billion in capital to strengthen its balance sheet.
The news gave investors hope that financial institutions, which have taken the brunt of the fallout from the credit crisis, were on the road to recovery.
On Bay Street, Canadian Imperial Bank of Commerce (CM.TO: Quote) was up C$2.80, or 4.2 percent, at C$68.90, and Toronto-Dominion Bank (TD.TO: Quote) added C$1.98, or 3.2 percent, to C$64.50. The sector as a whole rose 2.5 percent.
Financials even took heart from a hefty $19 billion writedown by UBS UBSN.VX as optimism rose that banks were starting to come clean about their exposure to the U.S. subprime mortgage debacle.
"We have seen the market struggling to establish a bottom, and at this point it feels like it has been successful to quite an extent at doing so," said Elvis Picardo, investment strategist at Northern Securities Inc., in Vancouver, British Columbia.
"But I still think that sentiment is still fragile."
The S&P/TSX composite index .GSPTSE closed up 90.59 points, or 0.68 percent, at 13,440.72 with seven of its 10 main groups in positive territory. Continued...