CANADA STOCKS-Healthy bank results take TSX to near 3-year high

Thu Mar 3, 2011 4:38pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

   * TSX ends up 70.70 points, or 0.5 pct, at 14,214.72
 * Six of the 10 main groups higher
 * RBC up more than 5 pct, TD up almost 4 pct
 * Oil and gold shares slip as resource prices ease
 (Updates to close, adds details, quotes)
 By Claire Sibonney
 TORONTO, March 3 (Reuters) - Toronto's main stock index
pushed to its highest level in almost three years on Thursday,
as investors cheered stellar quarterly results from Canada's
two biggest banks, sending financial shares up sharply.
 Royal Bank of Canada RY.TO surged more than 5 percent to
C$59.92 and Toronto-Dominion Bank TD.TO jumped almost 4
percent to C$83.60 -- both handily beating expectations as a
strong economy supported loan growth and investment banking
profit. [ID:nN03109694]
 TD also raised its quarterly dividend by 8.2 percent,
becoming the first of the country's big five banks to do so
since the financial crisis.
 "Very positive news out of the banks today... I think it
puts a positive light on the earnings expectations for the
banks yet to come, and we may see more broad-based dividend
increases," said Philip Petursson managing director of
portfolio advisory at Manulife Asset Management.
 John Kinsey, portfolio manager at Caldwell Securities, said
TD Bank and Canadian Imperial Bank of Commerce CM.TO, up 0.2
percent at C$82.59, are likely to consider a stock split if
their shares keep heading toward the C$100 mark.
 "The main feature -- and the saving grace here -- is the
financials," said Kinsey. "Commerce had set a very high bar,
but it didn't seem to be a problem today."
 The financials group, which makes up a third of the TSX
index, rallied more than 2 percent. RBC and TD were by far the
most influential movers.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended up 70.70 points, or 0.5 percent at 14,214.72.
It was the best close since June 2008. Six of the TSX's 10 main
groups finished higher.
 "It's hard to see the risks to the downside," said
 "The economic data that we've seen this week and the near
conclusion of the earnings season in the U.S. and Canada just
indicate that earnings growth is sustainable. And, as we move
towards the next earnings season, if expectations are where
they are, we can definitely continue to see new highs."
 Energy and gold miners sold off, with the former group
giving back 0.9 percent and the latter down 1.5 percent.
 The moves lower tracked a slip in commodity prices and
market watchers said investors were likely taking profits
following recent impressive runs in those sectors.
 U.S. crude oil futures fell after Venezuela pitched a plan
to resolve Libya's crisis. Weaker oil prices also diminished
the safe-haven appeal of gold, as did indications the European
Central Bank may raise interest rates to battle inflation.
[O/R] [GOL/] [ID:nLDE7220R1]
 Canadian Natural Resources CNQ.TO, which swung to a
fourth-quarter loss on Thursday, was the lead decliner,
shedding 3.5 percent to C$47.97. Barrick Gold Corp lost 2.6
percent to C$51.10. [ID:nL3E7E30VP]
 "When it looked like civil war (in Libya), oil went sky
high, as did gold, now they're doing a reversal here ... so the
obvious ones are being affected by that," said Kinsey.
 ($1=$0.97 Canadian)
 (Additional reporting by Solarina Ho; editing by Rob Wilson)