CANADA STOCKS-Financials help TSX limp to higher close

Fri Jul 24, 2009 5:20pm EDT
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* TSX up 0.11 pct at 10,687.90; 2nd straight weekly gain

* Turnaround in financials props up index

* Materials and energy groups finish lower (Adds details, quote)

By Ka Yan Ng

TORONTO, July 24 (Reuters) - Toronto's main stock index finished marginally higher on Friday as optimism over the economic recovery buoyed financial shares but did not extend to most of the other sectors.

A 1.81 percent gain in the index's heavily weighted financials group -- a big turnaround from the opening bell when it declined sharply -- was almost single-handedly responsible for propping up the index as most of its other sectors fell.

All five of the market's big banks and its biggest insurer dominated the heavyweight gainers list. The list was topped by Bank of Nova Scotia (BNS.TO: Quote), which jumped 3.45 percent to C$45.33, and Manulife Financial (MFC.TO: Quote), which climbed 3.44 percent to C$24.64.

Euphoria following the Bank of Canada's mostly rosy economic outlook on Thursday carried through to the financials on Friday on hopes that the group will benefit from better economic times.

"The financials will be one of the biggest beneficiaries as we would expect fewer nonpayments of loans and that the lending business will continue to get stronger," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.   Continued...