CANADA STOCKS-TSX boosted by bank profits, gold prices

Tue Mar 2, 2010 10:43am EST
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* TSX up 51.85 points at 11,779.91

* Financials, materials lead gainers

By Claire Sibonney

TORONTO, March 2 (Reuters) - Toronto's main stock index rose on Tuesday morning as gold prices surged and strong quarterly results from Bank of Montreal BMO.TO put the spotlight on the index's heavily weighted financial sector.

The strong performance at Canada's fourth-largest bank sent its shares up 3.2 percent to C$58.45 and extended a trend set last week by Canadian Imperial Bank of Commerce CM.TO and National Bank of Canada NA.TO, suggesting the worst of credit woes are behind the nation's big lenders. [ID:nN02136197]

Royal Bank of Canada RY.TO, the country's biggest bank, gained 1.3 percent to C$58.12.

"As the economy starts to firm you're going to have fewer loan losses and people become a little more optimistic," said Irwin Michael, a portfolio manager at ABC Funds, referring to Monday's data on robust fourth-quarter economic growth. [ID:nN01242801]

"I don't think we're going to see any dividend increases yet but the key thing is to see banks consolidate, either stabilize or improve on their earnings, and I think that will be a big factor for the marketplace."

Firm gold and oil prices also helped support the resource-heavy index.   Continued...