May 27, 2011 / 9:52 PM / 6 years ago

CANADA STOCKS-TSX pushes higher despite slumping banks

   * TSX up 21.69 points, or 0.16 percent, at 13,797.59
 * Eight of the index’s 10 main groups close higher
 * Royal Bank falls hard on disappointing earnings  (Updates with details, comments)
 By Solarina Ho
 TORONTO, May 27 (Reuters) - Toronto’s main stock index closed near a four-week high on Friday as firmer commodity prices pushed up resource issues, overcoming a big drop in Royal Bank of Canada.
 Gold and copper prices rose to near three-week highs, helped by a weaker U.S. dollar, lifting the index’s materials group to a 1.05 percent gain. [GOL/] [MET/L]
 In that group, three stocks -- Kinross Gold (K.TO), diversified miner Teck Resources TCKb.TO and fertilizer producer Potash Corp (POT.TO) -- were the three most influential gainers on the index, accounting for 0.12 percent of its rise.
 Kinross jumped 4.93 percent to C$15.76, while Teck climbed 2.38 percent to C$50.32, and Potash was up 1.15 percent at C$54.69.
 “All of our strength is coming basically from the metals sector in particular,” said Fred Ketchen, director of equity trading at ScotiaMcLeod.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 21.69 points, or 0.16 percent, at 13,797.59. The TSX gained 1.06 percent for the week and closed at its highest level since May 2, when it finished at 13,934.51.
 Eight of its 10 main groups were in positive territory. The hefty financial sector and the consumer staples group were the lone decliners.
 Financials fell 0.82 percent with Royal Bank of Canada (RY.TO), the country’s largest bank, by far the biggest drag after it reported a higher profit but fell short of analyst expectations due to weakness in its capital markets unit. [ID:nN27293256]
 Royal also announced a higher dividend, but that didn’t stop its shares from falling 3.03 percent to C$57.36. RBC’s drop was 4-1/2 times more influential on the index than that of the next biggest downside mover -- Suncor Energy (SU.TO) -- which was off 0.85 percent at C$40.75.
 “Here’s another bank now that has increased quarterly dividend again ... and that’s what shareholders like. They’ll be back,” said Ketchen.
 RBC’s results came just a day after Toronto-Dominion Bank (TD.TO) and Canadian Imperial Bank of Commerce (CM.TO) reported weaker than expected profits, which also sent their shares tumbling. [ID:nN27293256]
 Several analysts cut share-price targets on CIBC, while TD received a pair of raises and one reduction.
 “People are a little disappointed in the (bank) results as they’ve been coming out,” said Michael Sprung, president of Sprung & Co Investment Counsel. “They’ve been on the low end of estimates. But overall they’re not too bad. We are getting the dividend increases that we wanted to see.”
 Four of the top six decliners were banks.
 Another top decliner was Equinox Minerals EQN.TO, which slumped 6.06 percent to C$7.60. Equinox was back in the news on Friday following Zambia’s approval for Barrick Gold to take over the copper producer. [ID:nLDE74Q0YF] [ID:nASA028EJ]
 ($1=$0.98 Canadian)  (Reporting by Solarina Ho; editing by Peter Galloway and Rob Wilson)                                        

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