REFILE-CANADA STOCKS-TSX climbs as U.S. bank optimism builds

Fri Mar 13, 2009 12:15pm EDT
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(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: Quote), up 4.7 percent at C$13.30, and Royal Bank of Canada (RY.TO: Quote), which climbed 0.5 percent to C$35.17.

The climb came as Citigroup (C.N: Quote) 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: Quote), Citigroup (C.N: Quote) and JPMorgan Chase (JPM.N: Quote) 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.   Continued...