CANADA STOCKS-Banks drive TSX higher as RIM dives

Fri Jun 17, 2011 12:35pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

   * TSX up 34.33 points, or 0.27 pct, at 12,887.46
 * Eight of the 10 main groups higher
 * RIM down more than 20 percent
 (Updates with details and analyst's comments)
 By Trish Nixon
 TORONTO, June 17 (Reuters) - Toronto's main stock market
index was higher at midday on Friday as hints of an aid deal
for Greece brightened market sentiment and helped spur a broad
rally led by banks, which offset a plunge in Research In Motion
RIM.TO shares.
 The financial sector led the index with a rise of 0.54
percent. Royal Bank of Canada RY.TO was the most influential
gainer, climbing 1.47 percent to C$54.48 after reports said it
may have found a buyer for its U.S. retail banking operations.
 Limiting the TSX's gain was a 22 percent drop in RIM shares
to C$26.81 after it posted weak quarterly results and lowered
its forecasts late on Thursday. The results prompted analysts
to downgrade the BlackBerry maker's stock and cut price
targets. [ID:nL3E7HH1AW]
"The whole street is talking about Research In Motion's
earnings, the negative guidance from yesterday. That's nearly
30 basis points impact on the whole index," said Francis
Campeau, a broker at MF Global Canada. "On the positive side, I
think the market likes the fact that RBC is finally selling
their U.S. retail unit. RBC's positive impact is making up
about half of RIM's negative."
 At 11:55 a.m. (1530 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was up 34.33 points, or 0.27
percent, at 12,887.46. Eight of the index's 10 main groups were
 The TSX rallied along with global investor sentiment after
leaders of France and Germany said they were united behind a
new aid deal to save Greece from default. [ID:nLDE75G0ZQ]
 Some positive U.S. data supported the gains as a key gage of future economic activity rose more than expected in May.
[ID: nN17281627]
 The index's materials sector recovered from a dramatic day
of losses on Thursday, gaining 0.18 percent, and helped to
drive the index up.
 Campeau saw commodity prices and optimism over the Greek
debt crisis as driving factors for the gains.
 "Commodities are back up, we've heard some sort-of calming
speeches from European leaders in regards to Greece." He added
that whether the gains hold will depend on how the European
drama plays out.
 "The story is not clear, and until the final story is
clear, the market might continue to be choppy."
 Shares of Celestica CLS.TO, whose major customer is
Research In Motion, slid 8.56 percent to C$7.80 after Paradigm
Capital cut its share-price target to $12 from $14.
 Canadian National Railway CNR.TO was up 1.87 percent at
C$74.47, making it the second most influential gainer on the
index. Canada's biggest railway rebounded after its shares fell
on Thursday on news that it will sell assets of an indirect
subsidiary and enter a 10-year coal transportation agreement.
[ID nL3E7HG284]
 ($1=$0.98 Canadian)
 (Reporting by Trish Nixon; editing by Peter Galloway)