UPDATE 2-Toronto stocks climb, bank gains offset resources

Tue Apr 1, 2008 1:28pm EDT
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(Updates trading)

TORONTO, April 1 (Reuters) - The Toronto Stock Exchange's main index rebounded into positive territory on Tuesday, as banking sector gains offset a drop in resource issues.

The S&P/TSX composite index .GSPTSE was up 30.98 points, or 0.23 percent, at 13,381.11 in afternoon trading, as seven of its 10 main sectors advanced. It had earlier fallen as low as 13,254.04.

Banks were buoyed by news that U.S. bank Lehman Brothers Holdings Inc LEH.N had raised $4 billion in a convertible preferred stock offering to strengthen its balance sheet.

Canadian Imperial Bank of Commerce (CM.TO: Quote) was up C$2.26, or 3.4 percent, at C$68.36, and Toronto-Dominion Bank (TD.TO: Quote) added C$1.41, or 2.3 percent, to C$63.93. The sector added 1.7 percent.

Meanwhile, UBS UBSN.VX announced a $19 billion writedown on U.S. real estate and related assets, but financial shares rose on hopes that banks were starting to come clean.

"It's a huge writedown," said Douglas Davis, president at Davis-Rea. "It's unbelievable, but they're confident they can replace that money with a rights offering, so it tells me that the crisis is getting well past the half-way point."

That showed resilience in the financial markets and helped boost confidence in the Toronto stock market, Davis said.

Share of telecom companies also lifted the key index.   Continued...