CANADA STOCKS-TSX rises as commodities, banks lend support

Thu Aug 20, 2009 5:05pm EDT
 
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 * TSX up 13.68 points, or 0.13 percent, at 10,700.51
 * Materials group rises 0.5 pct on recovery sentiment
 * Financials up 0.3 pct ahead of bank results next week
 (Adds details, quotes)
 By Jennifer Kwan
 TORONTO, Aug 20 (Reuters) - Toronto's main stock index
edged up to a higher close on Thursday as commodity-related
shares rose following a rally in Chinese stocks, which helped
to soothe investor worries about the pace of economic
recovery.
 The index's materials group led the advance with a 0.5
percent gain. In the group, fertilizer producer Potash Corp of
Saskatchewan (POT.TO: Quote) was up 0.8 percent at C$105.29, and miner
Teck Resources TCKb.TO climbed 2.6 percent at C$28.39.
 Adding support, the heavily weighted financial group rose
0.3 percent ahead of quarterly results from Canada's big banks
next week.
 "People are setting up the Canadian banks for the earnings
next week," said Gareth Watson, Canadian equity advisor in
ScotiaMcLeod's portfolio advisory group. He said the rise in
the bank group is "based on the expectations earnings are going
to be better than expected".
 Royal Bank of Canada (RY.TO: Quote), a top heavyweight advancer,
was up 0.6 percent at C$50.89, while Bank of Nova Scotia
BNS.TO climbed 1.2 percent to C$44.89.
 The financial group also got a boost from lingering
optimism about recovery following reassuring North American
data this week, said Elvis Picardo, analyst and strategist at
Global Securities in Vancouver.  [ID:nN20525681]
 "The economic numbers that have been coming out this week
continue to confirm that the U.S. and Canada are emerging from
recession," he said.
 The S&P/TSX composite index .GSPTSE rose 13.68 points, or
0.13 percent, to close at 10,700.51, with three of its 10 main
groups higher.
 Oil prices were steady, settling 12 cents higher at $72.54
a barrel after rising sharply in the previous session, but
individual names in the index's energy sector were mixed.
Suncor Energy (SU.TO: Quote) dropped 1.2 percent at C$34.48.
 The firmness in oil prices was seen adding support to the
materials group.
 "Usually when oil prices move they do tend to influence the
entire commodities complex. I think perhaps there's a bit of a
follow on with that today," Watson said.
 The materials sector was also influenced by improved
sentiment after Chinese stocks .SSEC rose 4.5 percent on
Thursday, easing concerns about a nearly 20 percent descent in
China's equity markets over the past couple of weeks.
 Watson said it was a fairly lackluster day on the market.
 "I would chalk it up to a market trying to move higher but
finding difficulty doing so, probably because it's overextended
in the first place," he said.
 The market is up some 40 percent from its March lows.
 Gold prices were weaker but shares of gold miners were up
with the rest of the materials group. Goldcorp (G.TO: Quote) was up
0.2 percent at C$38.40, and Agnico-Eagle AEM.TO rose 1
percent to C$60.31.
 Among the most influential movers on the downside was
Bombardier (BBDb.TO: Quote) which fell 3.9 percent to C$3.98 after it
terminated a large Learjet contract with Jet Republic after the
airline declared insolvency. [ID:nN20509344]
 That weighed on the index's industrials group, which
slipped 0.8 percent.
 The blue chip S&P/TSX 60 index .TSE60 closed 0.22 of a
point higher, or 0.03 percent, at 643.74.
 ($1=$1.09 Canadian)
 (Reporting by Jennifer Kwan; editing by Peter Galloway)