April 18, 2008 / 9:15 PM / 9 years ago

UPDATE 4-Banks give Toronto stocks a hefty boost

(Adds details, quotes)

By Leah Schnurr

TORONTO, April 18 (Reuters) - The Toronto Stock Exchange’s main index finished the week strongly higher on Friday, spurred by financial issues, which rallied on hope that the worst of the credit crisis is over.

All of the market’s major banks pushed higher in the wake of quarterly results from U.S. financial institutions that gave investors confidence they were getting closer to wiping the slate clean by taking writeoffs and cutting costs.

Bank of Nova Scotia (BNS.TO) was up C$1.61, or 3.5 percent, at C$47.50, and Royal Bank of Canada (RY.TO) gained 71 Canadian cents, or 1.5 percent, to C$48.06. Overall the sector climbed 2.1 percent.

Levente Mady, a broker at MF Global Canada in Vancouver, said that as well as the banks’ results, measures taken by the U.S. Federal Reserve to ease tightness in credit markets are beginning to sooth investors’ nerves.

“Essentially, what’s happening is the market is settling down a little bit in terms of reassurances from the Fed and other central banks ... that they’re making sure that they provide adequate liquidity,” said Mady.

The S&P/TSX composite index .GSPTSE closed up 121.56 points, or 0.86 percent, at 14,237.06, with all but two of its 10 main groups higher.

The benchmark rose 4.1 percent on the week, pushing past the 14,000-mark and rising to highs not seen since early November.

Declines in gold producers weighed on the index on Friday as the sector was stung by falling gold prices. Barrick Gold (ABX.TO) shed C$1.72, or 3.8 percent, to C$43.80, while Kinross Gold (K.TO) dropped C$1.29, or 5.1 percent, to C$23.85.

Shares of miners with projects in Ecuador also fell, after the country voted to halt exploration projects for up to six months, until a new mining law is approved. Aurelian Resources ARU.TO plunged C$2.32, or 31.5 percent, to C$5.04, while the larger Iamgold Corp IMG.TO gave up 25 Canadian cents, or 3.4 percent, at C$7.13.

The gold group lost 3.6 percent and helped drag the larger materials sector down 0.8 percent.

But shares of Potash Corp of Saskatchewan (POT.TO) swam against the tide, adding to their recent gains. The stock finished up C$8.82, or 4.5 percent, at C$205.70.

The tech sector jumped 2.4 percent the day after U.S. bellwether Google (GOOG.O) reported better than expected results and said it saw no impact on its business from a weakening U.S. economy.

BlackBerry-maker Research In Motion RIM.TO was up C$3.72, or 3.1 percent, at C$123.57, while Nortel Networks NT.TO added 37 Canadian cents, or 5.2 percent, to C$7.48.

Rick Hutcheon, president and chief operating officer at RKH Investments, said that for next week, he wouldn’t be surprised to see the Toronto index tread water after this week’s strength.

“I think we could be entering a shorter-term period of a rally in the U.S. dollar and that would put pressure on the commodities, and probably keep us from doing very much,” Hutcheon said.

Market volume was 387 million shares worth C$8.3 billion. Advancers outpaced decliners 889 to 693. The blue chip S&P/TSX 60 index .TSE60 closed up 8.41 points, or 1.01 percent, at 842.53.

On Wall Street, stocks ran higher after quarterly results from companies including Google and Caterpillar (CAT.N) topped expectations.

The Dow Jones industrial average .DJI finished up 228.87 points, or 1.81 percent, at 12,849.36, and the Nasdaq composite index .IXIC rose 61.14 points, or 2.61 percent, to 2,402.97.

$1=$1.01 Canadian Editing by Rob Wilson

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