CANADA STOCKS-TSX rallies with economic hopes, banks lead

Thu Oct 22, 2009 3:48pm EDT
 
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 * TSX up 0.69 percent at 11,521.50
 * BoC says economy recovering, faces hurdles
 (Adds details, comments)
 TORONTO, Oct 22 (Reuters) - Toronto's main stock index was
higher by late afternoon on Thursday, as investor optimism
buoyed financial issues, after the Bank of Canada said the
Canadian economy was recovering faster than expected.
 But the central bank, which fleshed out its upgraded growth
forecasts for the third and fourth quarters, also cautioned the
economy faces a number of risks, including a weak U.S. economy
and a Canadian dollar that seems set to stay strong.
[ID:nN22502163]
 Nonetheless, investors took the opportunity to pile into
banks and insurance issues, with all five big Canadian banks in
the top 10 notable advancers.
 The charge higher was led by Royal Bank of Canada RY.TO,
up 1.65 percent at C$56.53, followed by Toronto-Dominion Bank
TD.TO, up 2.01 percent at C$65.49.
 "The move up is being led by financials. They are the major
beneficiaries of the the Bank of Canada's Monetary Policy
Report today," said Elvis Picardo, an analyst and strategist at
Global Securities in Vancouver.
 "It gives the market confidence to know that the bank is
endorsing the economic recovery. Financial stocks are heavily
leveraged to the Canadian economy."
 At 3:35 p.m. (1935 GMT), the S&P/TSX composite index
.GSPTSE was up 79.48 points, or 0.69 percent, at 11,521.50.
 Earlier in the session, the index had fallen sharply on
weakness in oil prices and after Potash Corp POT.TO reported
a lower quarterly profit. [ID:nN22505738]
 (Reporting by Ka Yan Ng; editing by Rob Wilson)