CANADA STOCKS-Financials, energy trusts fuel TSX rally

Thu Oct 22, 2009 5:14pm EDT
 
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 * TSX finishes up 0.8 percent at 11,533.37
 * Banks the top climbers, sector up 1.5 percent
 * Energy trusts big gainers on back of Harvest deal
 * BoC says economy recovering, but faces hurdles
 (Adds details)
 By Ka Yan Ng
 TORONTO, Oct 22 (Reuters) - Toronto's main stock index
finished higher on Thursday as investor optimism buoyed
financial issues after the Bank of Canada said the domestic
economy is recovering faster than expected.
 Investors took the opportunity to pile into banks and
insurance issues, with all five big Canadian banks in the top
10 notable advancers and each gaining close to 2 percent or
more.
 The charge higher was led by Toronto-Dominion Bank (TD.TO: Quote),
up 2.4 percent at C$65.72, followed by Royal Bank of Canada
(RY.TO: Quote), up 1.7 percent at C$56.57.
  "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."
 In its report, which fleshed out its upgraded growth
forecasts for the third and fourth quarters, the Bank of Canada
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]
 The S&P/TSX composite index .GSPTSE finished 91.35
points higher, or 0.8 percent, at 11,533.37, reversing losses
at the start of the day. Nine of the index's 10 main groups
were higher.
 Consumer shares were supported by further evidence that the
economy is crawling towards recovery as Canadian retail sales
posted better than expected gains in August, data showed.
[ID:nN22538286]
 Oil prices fell from a one-year high [O/R] and weighed on
some energy shares, with Suncor Energy (SU.TO: Quote), the biggest
drag on the index. It fell 1.2 percent to C$39.20, while fellow
oil company Husky Energy (HSE.TO: Quote) dropped 5.1 percent to
C$30.95.
 But oil trusts performed strongly, helping the overall oil
and gas sector move up 0.5 percent, on the back of a C$1.8
billion deal that will see Korea National Oil Corp take control
of Harvest Energy Trust HTE_u.TO. [ID:nSP454119]
[ID:nN226427]
 It was the latest in a series of acquisitions of Canadian
assets by Asian state companies, and prompted rallies in other
trusts. Harvest led the way with a 34.11 percent surge to
C$9.79, while Penn West Energy Trust PWT_u.TO gained 9.2
percent to C$19.04, and Provident Energy Trust PVE_u.TO
jumped 6.5 percent to C$7.05.
 Potash Corp (POT.TO: Quote) recovered after investors punished the
fertilizer producer for reporting a lower quarterly profit. The
stock ended at C$108.08, up 0.73 percent.
[ID:nN22505738]
 Picardo said Potash's rebound was an example of recent
investor behavior.
 "There is a lot of money on the sidelines and investors are
getting in on the dips," he said.
 ($1=$1.05 Canadian)
 (Editing by Peter Galloway)