3 Min Read
* 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) were up 1.7 percent at C$56.81, while Toronto-Dominion Bank (TD.TO) was up 0.9 percent at C$66.43. Bank of Montreal (BMO.TO) 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) 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) ((firstname.lastname@example.org; Reuters Messaging: email@example.com; 416-941-8109))