May 27, 2010 / 2:40 PM / 7 years ago

CANADA STOCKS-TSX surges as China news boosts commodities

3 Min Read

* TSX up 127.81 points, or 1.11 percent, at 11,671.71

* Weak bank results limit TSX gains

* Nine of 10 indexes higher (Adds details, quote)

By Jennifer Kwan

TORONTO, May 27 (Reuters) - Toronto's main stock market index climbed sharply on Thursday morning, supported by rising commodity prices and a rebound in global equities, even though the market showed disappointment with the quarterly results of several Canadian banks.

Resource issues led the way up as oil climbed above $73 a barrel, while gold and base metals prices also had a firmer showing. [O/R] [GOL/] [MET/L]

Canadian Natural Resources (CNQ.TO) rose 3.5 percent to C$35.99, while Suncor Energy (SU.TO) climbed 2.9 percent to C$31.59. Teck Resources TCKb.TO was up 4.5 percent at C$36.08.

The catalyst helping markets higher on Thursday was an affirmation by China that it is a long-term investor in Europe, said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

"That helped dampen concerns that the region's debt crisis will worsen. That helped bolster commodities," Ibel said, referring to euro zone debt problems.

The Chinese central bank said on Thursday that Europe remains a key investment market for China's foreign exchange reserves, helping to soothe markets that were unnerved on Wednesday by a report that China was reviewing its euro-zone bond holdings. [ID:nTOE64Q04P]

The news helped the euro rebound and sent global stock markets higher. [MKTS/GLOB]

At 10:11 a.m. (1411 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 127.81 points, or 1.11 percent, at 11,671.71, with nine of its 10 main groups higher.

The sole sector in the red was the hefty financials sector, down 0.3 percent.

Three big Canadian banks reported higher profits on Thursday but their results were below lofty market expectations. [ID:nN27201801]

"We had a few financials miss so that is limiting the upside of the index today," Ibel said.

Royal Bank of Canada (RY.TO), Canada's biggest bank, fell 3.9 percent to C$57.15, while No. 5 Canadian Imperial Bank of Commerce (CM.TO) sank 3.2 percent to C$72.88. Toronto-Dominion Bank (TD.TO), Canada's second largest lender, was up 0.05 percent at C$72.84.

In contrast, No. 4 Bank of Montreal (BMO.TO) was up 2.7 percent at C$61.89 after reporting forecast-topping results on Wednesday.

$1=$1.06 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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