UPDATE 3-Toronto stocks higher as banks offset resources
(Updates with closing numbers, adds details, quotes)
TORONTO, March 20 (Reuters) - The Toronto Stock Exchange's main index ended a volatile session higher on Thursday, as financials were buoyed by Bank of Montreal's BMO.TO deal to restructure two of its commercial paper trusts.
The rally in the banking sector helped the benchmark overcome earlier sharp declines, as it was dragged down by resource issues that were shaken by retreating commodities.
Bank of Montreal BMO.TO jumped C$2.41, or 5.7 percent, to C$44.51 after it said late on Wednesday it had come to an agreement with counterparties and investors to restructure its Apex and Sitka commercial paper trusts.
The sector as a whole gained 2.1 percent, as Canadian Imperial Bank of Commerce CM.TO rose C$4.09, or 6.8 percent, to C$64.26 and National Bank of Canada NA.TO was up C$3.18, or 7.1 percent, at C$48.18.
"BMO set the tone and it may be that they've put a finger in the dyke at least," said John Kinsey, portfolio manager at Caldwell Securities Ltd.
"In our case it was really the ABCPs that were the problem, more so than any of the subprime or the derivatives (problems in the United States)," said Kinsey. "If indeed that is the case, we may be 90 percent there to remedying the situation and that obviously would be good for Canada."
The S&P/TSX composite index .GSPTSE closed up 66.26 points, or 0.52 percent, at 12,775.64 with six of its 10 main groups higher.
Shares in energy and mining companies came off the day's lows but still finished in the negative amid a second day of retreating commodity prices. Continued...