3 Min Read
(Changes day in 3rd paragraph to Thursday)
* TSX up 0.27 percent at 8,304.44
* Financials rise 1.1 percent (Adds details)
By Jennifer Kwan
TORONTO, March 13 (Reuters) - Toronto's main stock index rose on Friday morning as financial shares gained on hope the U.S. banking sector is finding stability.
Financial issues rose 1.1 percent, adding to gains logged in the previous three sessions. Major gainers in the sector were Manulife Financial (MFC.TO), up 4.7 percent at C$13.30, and Royal Bank of Canada (RY.TO), which climbed 0.5 percent to C$35.17.
The climb came as Citigroup (C.N) Chairman Richard Parsons told Reuters on Thursday that the bank does not need any more government capital injections and expressed confidence Citi would remain in private hands. [ID:nN13426253]
The financial sector, which makes up about 30 percent of the Toronto index's total weighting, lit a fire under the market this week after Bank of America (BAC.N), Citigroup (C.N) and JPMorgan Chase (JPM.N) executives all provided reassuring statements about their banks' profitability.
But it's doubtful the rally can be sustained, said Fergal Smith, managing market strategist at Action Economics. "I would lean toward it being a bear market rally," Smith said.
"I think the economic overlay is clearly weak. More than that, I think it's going to remain weak longer than most people think. In that environment, it's going to be difficult for equity markets to rally."
At 9:56 a.m., (1356 GMT), the S&P/TSX composite index .GSPTSE was up 22.17 points, or 0.27 percent, at 8,304.44, with six of its 10 main groups higher.
The market appeared to shrug off data that showed Canada's economy lost more jobs than expected in February, another sign that the country's recession may be more severe than many previously thought. [ID:nN13253705]
"The jobs data confirmed the deepening recession," Smith said. "What's going to be more important for the Canadian equity market today is how Wall Street performs, how commodity markets perform."
The energy sector rose 0.3 percent as the price of oil held on to gains above $47 a barrel ahead of an OPEC meeting this weekend. Suncor Energy (SU.TO) was up 1.8 percent at C$32.85.
Materials, which rose at the outset, sank 0.4 percent despite largely firm gold and base metals prices. Gold miner Barrick Gold (ABX.TO) climbed 0.5 percent to C$37.13.
$1=$1.27 Canadian Reporting by Jennifer Kwan; Editing by Peter Galloway