CANADA STOCKS-Buoyant financials power TSX higher

Wed Jan 28, 2009 11:24am EST
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* Financials lead TSX higher on U.S. bank action hopes

* Seven banks and insurers are top advancers

* Materials group lower on falling gold price

* France's Total launches C$617 mln bid for UTS Energy (Updates to midmorning, adds details)

By Ka Yan Ng

TORONTO, Jan 28 (Reuters) - Toronto's main stock index rose 1.6 percent on Wednesday morning, led higher by the heavily weighted financial sector on hopes that Canada's C$40 billion ($33 billion) stimulus package and further U.S. government action would promote economic stability.

There was optimism that the new U.S. administration was moving quickly to stabilize the ailing banking sector, helping to boost U.S. stocks, and as lawmakers prepared to vote on a stimulus package to help the recession-hit economy.

This sentiment spilled over to Toronto's financials group, which rose 5.5 percent.

"We'll see if that's enough to sustain this rally," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.   Continued...