CANADA STOCKS-Financials lead TSX higher at midday

Tue Jan 27, 2009 1:34pm EST
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* Stronger financials overcome commodity groups

* Outlook upbeat for banks, insurers

* Federal budget due after markets close

TORONTO, Jan 27 (Reuters) - Toronto's main stock index climbed nearly 1 percent on Tuesday afternoon in a broad rally led by stronger financial issues, which overcame the drag from heavily weighted commodity groups.

Banks and insurers dominated the gainers. Royal Bank of Canada (RY.TO: Quote) was up 3.2 percent at C$30.45, while Manulife (MFC.TO: Quote) gained 3.6 percent to C$20.90.

The sector gained 2.6 percent, partly on hopes that the federal budget, due after market close, would contain measures to ensure further stability in the financial system.

"There is widespread expectation it may have some fairly stimulative measures and that is helping financials," said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.

"Anything that is perceived to be good for the economy or that could lessen the impact of the recession would help the market in general and financials in particular."

The minority Conservative government is set to present plans to deal with the global economic crisis, and is expected to earmark money for infrastructure spending and aid to struggling industries such as lumber. [ID:nN23482302]   Continued...