TSX hits 2009 high; financials overcome weaker oil

Tue May 5, 2009 5:23pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - The TSX ended slightly higher on Tuesday after touching its highest level in almost 6 months, as a firmer financial sector overcame weak energy issues, which fell as oil prices sagged.

Six of the index's 10 main sectors were higher, including the key financials group, which rose 1.7 percent, and the consumer discretionary sector, up 1.3 percent.

Top advancers included Bank of Nova Scotia (BNS.TO: Quote), up 2.3 percent at C$36.30, and Toronto Dominion Bank (TD.TO: Quote), which climbed 2.1 percent to C$50.39.

Financials shrugged off caution south of the border over the U.S. bank stress test results, due May 7. A source familiar with official talks said U.S. regulators have deemed that about 10 of the 19 U.S. banks being stress tested will need to raise more capital.

"Right now the Canadian banks are perceived to be stronger and have better regulation and processes than their U.S. counterparts," said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

The results, which are expected to be closely watched, could surprise on the downside, warned Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

"Sentiment still remains positive but I think there's an undercurrent of caution ahead of the stress test results," he said.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 10.35 points, or 0.1 percent, at 9,880.72. Earlier, it hit 9,918.93, its highest level since early November.   Continued...

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch</p>