3 Min Read
* TSX up 0.09 percent at 11,379.22
* Bank shares down, miners rise
* Laurentian Bank reports higher profit, shares up (Adds details, comments)
By Cameron French
TORONTO, Dec 9 (Reuters) - Toronto's main stock index rallied late in the day to end slightly higher on Wednesday as financial shares pared losses after initially dropping on debt concerns, while a weaker U.S. dollar spurred mining shares higher.
The financial and energy sectors finished down 0.59 percent and 0.55 percent respectively, with the energy weakness due to a 2.6 percent drop in crude prices.
The index fell early and was at one point down more than 120 points, hurt by concerns of further debt defaults after Standard & Poor's cut its outlook on Spain to negative and warned of the risk of a debt downgrade.
"It was due to the macro news, the downgrade," John Ing, president of Toronto investment dealer Maison Placements, said of the financial sector's weakness.
Shares of the country's No. 1 bank, Royal Bank of Canada (RY.TO), fell 0.81 percent to C$54.78, while insurer Manulife Financial (MFC.TO) retreated 2.1 percent to C$17.49.
The strongest performer in the group was Laurentian Bank of Canada LB.TO, which rose 0.83 percent to C$42.45, after it reported a higher quarterly profit and increased its dividend, making it the first domestic bank to raise its payout since the financial crisis hit. [ID:nN08197421]
The S&P/TSX composite index .GSPTSE rose 10.29 points, or 0.09 percent, to finish at 11,379.22. The late-session rally followed a drop to a one-week low of 11,248.92.
The late gains snapped a four-day losing streak, which followed the index hitting a year high last week.
Ing said the recent declines are not a surprise given the Toronto index's robust 27 percent year-to-date gain, and the likelihood that many investors are selling some of their weaker stocks for a loss to offset capital gains taxes as the end of the year nears.
"On one hand you're getting tax-loss selling... and there's taking of profits," he said.
Seven of the 10 main TSX subgroups finished lower.
Materials issues were the strongest group, rebounding from the previous day's weakness to rise 1.8 percent, as investors focused on the weak U.S. dollar, rather than metals prices, which ended lower.
"I think in general the trend is down for the U.S. dollar, up for the Canadian dollar, and up for commodities," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
Base metals miner Teck Resources TCKb.TO charged ahead 4.6 percent to C$36.45, while fertilizer producer Agrium (AGU.TO) rose 3.7 percent to C$67.94.
($1=$1.05 Canadian) (Reporting by Cameron French; editing by Peter Galloway)