August 30, 2010 / 9:17 PM / in 7 years

CANADA STOCKS-Financials lead TSX to modest gain

* TSX up 15.83 points at 11,895.55

* Investors pick up beaten-down bank shares

* Move higher contrasts with U.S. equity retreat

* RIM edges higher on India reprieve; Potash gains (Adds company news)

By Jennifer Kwan

TORONTO, Aug 30 (Reuters) - Toronto’s main stock index ended slightly higher on Monday, led by rising financial issues, but broader investor concerns about the recovery rattled global equities and kept TSX gains in check.

The TSX held above water on strength in banking, with Royal Bank of Canada (RY.TO) up 1.7 percent at C$51.25, and Bank of Montreal (BMO.TO) higher by 1.3 percent at C$58.33. National Bank of Canada (NA.TO) climbed 2 percent to C$61.22.

The broader financials group, up 0.5 percent, led the way higher as investors bought beaten-down shares, which had fallen in recent weeks the back of concerns about the global recovery.

More recently, some bank issues tumbled after reporting weak trading results, said Rick Meslin, head of Canadian equities at UBS.

“People are a little constructive now suggesting that future quarters might have some big ticket items, that the poor performance of trading revenue probably isn’t going to be much of a factor in the next quarter,” said Meslin.

However, Toronto-Dominion Bank (TD.TO) and Bank of Nova Scotia (BNS.TO), both to report results this week, slipped by about 0.2 percent.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished the session up 15.83 points, or 0.13 percent, at 11,895.55. Earlier, the index rose to 11,952.64, its strongest level since June 22. Half of the index’s 10 main groups were higher.

The blue chip S&P/TSX 60 index .TSE60 closed 1.52 points higher, or 0.22 percent, at 693.85.

Toronto’s performance contrasted with U.S. stock indexes, which sank on investor wariness about the economic recovery, and global stocks were also lower. [.N] [MKTS/GLOB]

Investors were cautious ahead of closely watched U.S. data on manufacturing, services and August non-farm payrolls due later in the week, which are expected to confirm the economy is continuing to slow. [ECON/US]

In Canada, Tuesday’s release of second-quarter gross domestic product data may help seal expectations of whether the Bank of Canada will raise interest rates on Sept. 8. [ECON/CA]

Those broader economic worries capped gains on the TSX’s resource-heavy index on Monday.

“There’s no confidence in the market right now. It’s low volume. Investors seem to be sitting back and waiting for direction,” said Meslin.

Elsewhere, Research In Motion RIM.TO finished the day largely flat, up just 0.04 percent at C$48.37, as the BlackBerry maker averted a threatened ban on its services in India.

RIM will give India access to secure BlackBerry data beginning Sept. 1, a government source said on Monday, leading New Delhi to put off a decision on whether to shut down the smartphone. [ID:nSGE67T0I0]

Takeover target Potash Corp (POT.TO), closed up 0.55 percent at C$155.85 and remained in the corporate spotlight. BHP Billiton (BHP.AX) (BLT.L) denied on Monday that it had plans to sell off some of Potash’s assets if it succeeded in its $38.6 billion hostile takeover bid. [ID:nN30130530]

Lululemon LLL.TO, the top net loser on the market, dropped 9.8 percent to C$33.75 after Jefferies & Co downgraded the stock to “underperform” from “hold” saying the specialty clothing retailer is reinvesting in inventory at the wrong time. [ID:nSGE67T0HF] [CA-RCH]

$1=$1.06 Canadian Reporting by Jennifer Kwan

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