February 7, 2011 / 10:50 PM / 7 years ago

CANADA STOCKS-TSX gets boost from financials but oils drag

   * TSX up 20.08 points, or 0.15 pct, at 13,811.93
 * Seven of the 10 main groups finish higher
 * Financials up 0.38 pct, energy down 0.3 pct  (Adds details, comments)
 By Solarina Ho
 TORONTO, Feb 7 (Reuters) - Toronto’s main stock index closed modestly higher on Monday as financial issues gained on increased confidence in the economic recovery, but energy shares dropped as oil prices eased.
 Among financials, Manulife Financial (MFC.TO) was up 1.65 percent at C$19.15, while Bank of Montreal (BMO.TO) rose 1.02 percent to C$59.50, and Bank of Nova Scotia (BNS.TO) advanced 0.53 percent to C$58.60.
 “The insurance companies look great ... not only valuations. The things that really hurt them were the falling interest rates and falling stock market and both of those have reversed course, so I think the outlook looks quite good. I also think they’re underowned,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
 The financials group, which makes up nearly 30 percent of the index, rose 0.38 percent, its fifth rise in the past six sessions.
 “It seems the financial side of the equation is continuing on its recent strength. It’s driven on global positive sentiment ... worldwide positive growth,” said Francis Campeau, a broker at MF Global Canada.
 Data in January showed signs that the economic recovery was gathering steam, particularly in the United States, which has encouraged stock markets higher. In New York, the S&P 500 and the Dow Jones industrial average both hit 2-1/2 year highs on Monday.
 The Toronto Stock Exchange S&P/TSX composite index .GSPTSE rose 20.08 points, or 0.15 percent, to finish the day at 13,811.93.
 Seven of the index’s 10 main sectors finished higher. Technology stocks gained 0.7 percent. Other gainers included the materials group, home to mining companies, which was up 0.42 percent.
 Fertilizer giants Potash Corp (POT.TO) and Agrium Inc (AGU.TO) both helped pull the materials group higher. Potash was the biggest blue chip gainer, rising 1.51 percent to C$181.87. Agrium, which will report quarterly earnings on Wednesday, rose 2.22 percent to C$92.51.
 “I think the agricultural stocks are going to be better than the base metals and the golds. Potash prices have recently moved up ... fertilizer prices, percentagewise, are going to go up more than the base metals,” said Nakamoto.
 “(Food) demand is very strong, and supply is weak at best because of the various weather conditions out there.”
 Oil and gas stocks dropped 0.3 percent.
 Imperial Oil (IMO.TO) fell 1.35 percent to C$44.58, while Suncor Energy (SU.TO) slipped 0.54 percent to C$40.39.
 Crude prices fell as concerns eased over Egypt’s political crisis and how it might affect oil flows in the Middle East. Rising U.S. inventories also weighed. [O/R]
 “Turbulence fading off in Egypt and warmer weather expected is bringing both oil and natgas prices down,” Campeau said.
 In individual company news, US Gold Corp UXG.TO rose 2.77 percent to C$7.04 after it said results from a preliminary economic assessment of its El Gallo gold-silver project in Mexico were encouraging. [ID:nN07224451]
 Crystallex International KRY.TO finished down 39 percent at 14 Canadian cents after sinking as much as 56 percent. The gold miner took a big hit after after the Venezuelan government withdrew a permit allowing the miner to develop the Las Cristinas project. [ID:nN07202465]
 ($1=$0.99 Canadian)  (Reporting by Solarina Ho; editing by Peter Galloway)                                        

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