TSX gains for third straight day on financials

Mon Jul 27, 2009 5:07pm EDT
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By Ka Yan Ng

TORONTO (Reuters) - Toronto's main stock index moved higher for a third straight session on Monday, helped by economic recovery hopes that lifted the financial group.

Similar to Friday's session, financials were almost single-handedly responsible for propping up the TSX index -- with a healthy 2.23 percent gain -- as six of the other main sectors fell.

Steady optimism triggered last week by the Bank of Canada's declaration that the recession was over has buoyed the financial sector, which has risen nearly 7 percent since the rosier outlook was announced. Eight of the 10 most influential gainers were from the financial group.

Insurers were among the biggest winners, with Manulife Financial up 5.72 percent at C$26.05, while Sun Life rose 8.79 percent to C$37.98.

"It's primarily the financials. They're putting on a good show today but the oils and the materials seem to have faded on us here," said John Kinsey, portfolio manager at Caldwell Securities Ltd.

Canada's big four life insurers now look to be better bets than either their U.S. rivals or the big Canadian banks as a surging stock market brings profits bouncing higher after three awful quarters. Most of them will report results next week.

However, big banks also made strides, with Toronto-Dominion Bank rising 1.54 percent to C$63.21, while Bank of Nova Scotia climbing 1.7 percent to C$46.10.

The financial group stands to be one of the biggest beneficiaries of a return to economic growth because it may mean less pressure on loan loss provisions, money set aside for bad loans.   Continued...