CANADA STOCKS-TSX climbs on gold rally, bank earnings boost

Thu Sep 3, 2009 2:32pm EDT
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 * TSX rises more than 2 pct, then trims gains
 * Materials sector up 3.6 percent as gold nears $1,000/oz
 * Financials rise after two straight down days
 (Adds details, quote)
 TORONTO, Sept 3 (Reuters) - Toronto's main stock index
climbed on Thursday afternoon as soaring gold prices pushed up
materials shares and as investors returned to financial shares
after a selloff earlier this week.
 Gold miner Barrick Gold ABX.TO gained 4.4 percent to
C$43.76 to lead all influential risers, while Goldcorp Inc
G.TO, up 4.35 percent at C$45.77, was not far behind.
 The broader materials sector was up 3.6 percent, helped by
strength in base metals and gold, which neared $1,000 an
 At 2:19 p.m. (1819 GMT), the S&P/TSX composite index
.GSPTSE was up 194.24, or 1.8 percent, at 10,894.63.
 "The gains have been fairly broad based but the materials
sector has been the key driver," said Fergal Smith, managing
market strategist at Action Economics.
 "Both base and precious metals have advanced. The huge
rally on the Shanghai composite overnight helped boost market
sentiment and sparked rotation back into the riskier assets."
 Risk appetite was strengthened by overseas markets where
emerging stocks .MSCIEF gained, and Shanghai stocks .SSEC
climbed after China's top regulator assured investors that the
country's market was healthy. The health of Chinese stocks has
often been seen lately as a barometer of economic optimism.
 Financials were also strong performers, up 1.4 percent
after two straight down days, following better-than-expected
earnings from a pair of regional banks that closed the Canadian
banks' earnings season. [ID:nN039427]
 The results reminded investors of the trend of upside
surprises by Canada's major banks in the third quarter, which
had spurred big gains last week.
 Among the top banking gainers were Royal Bank of Canada
RY.TO, up 1.3 percent at C$55.45, and Toronto Dominion Bank
TD.TO, up 1.2 percent at C$65.06.
 (Reporting by Jennifer Kwan and Ka Yan Ng; Editing by Jeffrey