December 21, 2010 / 10:09 PM / 7 years ago

CANADA STOCKS-TD's US acquisition lifts TSX to 1-week high

3 Min Read

   * TSX up 171.87 points, or 1.3 percent, at C$13,365.15
 * Nine of the index's 10 main sectors advanced
 * Toronto-Dominion Bank up 3.74 percent at C$73.16  (Updates to close, adds comment)
 By Solarina Ho
 TORONTO, Dec 21 (Reuters) - Toronto's main stock index surged to a one-week high on Tuesday, finishing up more than 1 percent as Toronto-Dominion Bank's (TD.TO) $6.3 billion purchase of Chrysler Financial helped spur a broad rally. [ID:nN20216127]
 Weighty financial stocks climbed 1.45 percent, led by TD Bank, which rose 3.74 percent to C$73.16. Royal Bank of Canada (RY.TO) climbed 2.05 percent to C$51.82. Bank of Montreal (BMO.TO), which fell in the last three sessions following its acquisition of Wisconsin lender Marshall & Ilsley, was up 2.08 percent at C$57.78.
 "Canadian banks continue to show their confidence in recovery in the U.S.," said Fred Ketchen, director of equity trading at ScotiaMcLeod.
 "So the trend continues. I think more and more as this happens, more Americans are watching and saying, 'What we've heard with Canadian banks being in much better shape than U.S. banks -- obviously it looks like it must be true'."
 TD Bank's cash deal will make Canada's No. 2 bank one of North America's biggest bank-owned auto lenders. TD won't issue any stock to fund its purchase of Chrysler Financial from Cerberus Capital Management [CBS.UL], a feature that helped push its shares up.
 The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 171.87 points, or 1.3 percent, at C$13,365.15.
 Nine of the index's 10 main groups were in positive territory. Index heavyweights such as energy stocks rallied 1.99 percent, while materials issues gained 0.94 percent. Telecom stocks were the lone decliners, slipping a modest 0.07 percent.
 Firmer oil prices, helped by surging gasoline futures, helped buoy Suncor Energy (SU.TO), up 2.4 percent to C$37.52, and Imperial Oil (IMO.TO), up 3.87 percent to C$40.30.
 Cold weather and rising expectations of growing demand from drivers helped give the gasoline support. [O/R]
 The materials group, home to miners, was bolstered by fertilizer makers Potash Corp (POT.TO), which climbed 2.67 percent, and Agrium Inc (AGU.TO), which jumped 3.22 percent to C$85.67.
 "They sold off over the last little while, but people are still realizing that you need this stuff. There continues to be growing demand for fertilizer and the world's population continues to increase," Ketchen said.
 ($1=$1.02 Canadian)  (Reporting by Solarina Ho; editing by Peter Galloway)                                        

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