CANADA STOCKS-TSX rallies as banks rise on bargain-hunting

Thu Dec 4, 2008 10:30am EST
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*Index rallies more than 100 points after 3 days of losses

*TD Bank up 1.5 pct, CIBC up 3.7 pct despite lower profits (Adds quote, details)

TORONTO Dec 4 (Reuters) - Toronto's main stock index rose on Thursday morning after three days of losses as investors looked past weak bank earnings in anticipation of improved performance by the financial sector in the coming year.

After beginning the day in negative territory, the S&P/TSX composite index .GSPTSE quickly gained steam and at 10:10 a.m. (1510 GMT) was up 136.79 points, or 1.65 percent, at 8,433.75, with all of its 10 main sectors higher.

Financials rose 1.7 percent with Toronto-Dominion Bank TD.TO up 1.5 percent at C$43.13 even though it reported its quarterly profit fell 7 percent because of previously announced writedowns for credit-trading losses in illiquid debt markets. [ID:nN03464085]

Canadian Imperial Bank of Commerce CM.TO rose 3.7 percent to C$46.99 after it said its quarterly profit fell 51 percent due to a variety of securities writedowns and mark-to-market losses [ID:nN03335793].

"I presume people are bargain-hunting at this point in time. They're all fairly depressed, the yields are exceptional," said Michael Sprung, president at Sprung & Co Investment Counsel.

"I think the market was far more prepared for writedowns and given that this is the fourth quarter I think everyone would be anticipating that the banks would be trying to take as many charges as they can at the end of what has already been a disastrous year in hopes that next year will look relatively much better."

The big resource sectors got a boost as oil and gold prices trimmed earlier losses.

The energy sector rose 0.6 percent with EnCana Corp ECA.TO up 2.6 percent to C$54.25.

The resource-laden materials group rose 3 percent with Barrick Gold ABX.TO up 3.9 percent at C$34.53. ($1=$1.26 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)