CANADA STOCKS-TSX swings higher as bank Dubai fears recede

Fri Nov 27, 2009 12:38pm EST
 
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 * TSX up 0.54 percent at 11,498.34
 * Financials get boost on lack of Dubai exposure
 * Market swings attributed to thin holiday dealings
 (Adds details)
 By Irene Kuan
 TORONTO, Nov 27 (Reuters) - Toronto's main stock index
rebounded from an early 1 percent fall on Friday as gains in
financial stocks overcame worries about debt problems in
Dubai.
 Shares of Royal Bank of Canada (RY.TO: Quote) were up 1.7 percent
at C$56.81, while Toronto-Dominion Bank (TD.TO: Quote) was up 0.9
percent at C$66.43. Bank of Montreal (BMO.TO: Quote) shares were up
1.3 percent at C$53.34.
 Canadian bank stocks fell sharply on Thursday on news of
debt problems in Dubai, but they were leading gainers on Friday
after no Canadian financial institution declared exposure and
many banks outside the Gulf played down any impact.
[ID:nGEE5AQ13P]
 "The bulk of the exposure is out of European banks. The
dust is slowly settling down. I'm under the impression that the
market overreacted," said Francis Campeau, broker at MF Global
Canada, in Montreal.   
 "Negative news in an illiquid market created panic."
 U.S. markets were closed on Thursday for Thanksgiving Day
making trade thin in Toronto and exaggerating market moves.
Similar conditions persisted on Friday.
 At 12:05 p.m. (1705 GMT), the S&P/TSX composite index
.GSPTSE was up 61.54 points, or 0.54 percent, at 11,498.34.
 The index dropped 1 percent at the opening bell and then
swung up nearly 1 percent as market players surveyed the day's
update on Dubai and tried to gauge U.S. consumer spending on
"Black Friday".
 This is often the single busiest shopping day of the
crucial holiday season with many retailers offering big sales.
Consumer spending accounts for about 70 percent of the U.S.
economy. [ID:nN26200289]
  Paul Harris, portfolio manager at Avenue Investment
Management, said the damage from the Dubai news may have been
more intense if it had coincided with the economic malaise at
the beginning of the year.
 "People are feeling more comfortable that the financial
structure of the world is not as bad," he said.
 Oil prices lifted off six-week lows to above $75 a barrel,
while gold prices cut losses to around 1 percent after tumbling
to a one-week low. [O/R] [GOL/]
 Major decliners were from the gold-mining group, including
a 2.9 percent drop in Red Back Mining RBI.TO to C$15.23,
while Barrick Gold (ABX.TO: Quote) lost 0.2 percent to C$45.52.
 Eight of the index's 10 main groups advanced.
 ($1=$1.06 Canadian)
 (Additional reporting by Ka Yan Ng; editing by Peter
Galloway)
 ((kayan.ng@thomsonreuters.com; Reuters Messaging:
kayan.ng.reuters.com@reuters.net; 416-941-8109))