* TSX up 0.42 percent at 11,401.89
* Financials turn higher, join golds in rise
* Energy shares cut losses (Updates with stock activity)
By Ka Yan Ng
TORONTO, Jan 26 (Reuters) - Toronto’s main stock index turned higher on Tuesday on strength in gold producers, while energy shares cut losses and financials advanced.
The index’s turnaround from a lower open came after after U.S. data showed consumer confidence rose for a third consecutive month in January. [ID:nN26357538]. In early trade the index had fallen to its lowest level since Dec. 9.
The index’s energy sector pared losses and the financials sector moved into positive territory after both groups had fallen hard on news that China implemented another clampdown on lending. [ID:nSGE60P039]
Gold producers led the advance despite a weaker price for the precious metal. Three gold miners were among the top 10 heavyweight advancers. Barrick Gold (ABX.TO) led the charge, up 1.7 percent at C$38.71.
All five of the nation’s biggest banks were higher, led by Royal Bank of Canada, up 1.2 percent at C$53.36.
At 12:30 p.m. (1730 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 47.38 points, or 0.42 percent, at 11,401.89. Half of the index’s 10 main groups were higher, including two of its heavyweight sectors.
“There’s a number of forces at work. One is concerns earlier that China’s slowdown or tightening would have a negative impact on commodities and gold. Actually that has dissipated,” said John Ing, president of Maison Placements Canada.
He said the State of the Union address by U.S. President Barack Obama on Wednesday would be closely watched. Ing said that even though the U.S. government will try to flatten spending, its debt is still huge and would weigh on the U.S. dollar, thereby giving gold a boost.
But some key blue-chip energy producers offset the decline, including Suncor Energy (SU.TO), up 0.2 percent at C$35.19, and Canadian Natural Resources CNQ.TO, up 0.65 percent at C$70.78. Both were leading decliners earlier.
$1=$1.06 Canadian Editing by Peter Galloway