CANADA STOCKS-TSX up sharply on stimulus hopes

Wed Jan 28, 2009 5:18pm EST
 
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* Financials lead TSX higher, aided by U.S. bank hopes

* Energy group also active on oil sands takeover bid

* Fed helps lifts TSX to highest level since Jan. 16 (Updates to closing figures, adds details)

By Ka Yan Ng

TORONTO, Jan 28 (Reuters) - Toronto's main stock index rose 1.7 percent on Wednesday, led by the heavily weighted financial sector, on hopes that the multibillion-dollar stimulus package unveiled in Tuesday's Canadian budget and further U.S. government action will promote economic stability.

The market saw the United States moving quickly to stabilize its ailing banking sector, which helped to boost U.S. stocks, as lawmakers prepared to vote on a stimulus package to help the recession-hit economy.

Five of Canada's biggest financial institutions were among the top 10 advancers, with the financial group as a whole up 4.7 percent.

Toronto Dominion Bank (TD.TO: Quote) gained 6.7 percent to C$42.38, while Bank of Nova Scotia (BNS.TO: Quote) rose 5.3 percent to C$31.17. Royal Bank of Canada (RY.TO: Quote), CIBC (CM.TO: Quote), and Manulife (MFC.TO: Quote) were also big gainers.

"We've got some rather magnificent gains in the financials south of the border and that's following through into Canada. That's the primary driver today," said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd., in Calgary.   Continued...