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TORONTO (Reuters) - Toronto's main stock index rose on Thursday as strength in financials outweighed weakness in mining and energy stocks and helped the index put in its best year since 1979.
Bank shares were among the top index winners, helped by U.S. economic data that showed a surprise drop in weekly U.S. jobless claims.
Toronto-Dominion Bank was the biggest gainer of the day. It rose 0.9 percent to C$65.96. Royal Bank of Canada was up 0.5 percent at C$56.40, and Bank of Montreal gained 1 percent to C$55.85.
It was the fourth consecutive daily gain for financials.
"It's the old story that Canada is not as affected by the shenanigans in the States," said Sal Masionis, a stockbroker at Brant Securities. "And where else are you going to get that kind of yield and potential for growth?"
Energy shares started the day higher, but fell as investors took profits and the price of natural gas declined after U.S. data showed a much smaller-than-expected drawdown from winter inventories.
Suncor Energy was the biggest loser on the index, down 0.9 percent at C$37.21, while EnCana shed 0.4 percent to C$34.11.
Another piece of U.S. data may have also played into the weakness in energy stocks and in a downturn in the index's materials sector as well, Masionis said.
The December reading of the Institute for Supply Management-Chicago index, also known as the PMI or purchasing managers' index, was revised to show that Midwest business growth was less robust than thought. [nN3199834]
"The big thing in the States was the PMI being updated," he said. "They did a correction on it from what they said yesterday, and that put a little kink into the markets."
Teck Resources fell 2.5 percent to 36.82 and Barrick Gold dropped 0.6 percent to C$41.46.
The S&P/TSX composite index ended the session up 28.65 points, or 0.24 percent, at 11,746.11.
For the year, the index rose 30.69 percent, rebounding from one of its worst years ever in 2008.
The year's best performing TSX sector was the information technology group, which is dominated by BlackBerry maker Research In Motion. The sector rose 53.5 percent after losing about half its value the year before. It was followed by financial services, up 38.5 percent; energy, up 37.3 percent; and materials, up 33.4 percent. Those three sectors make up about three-quarters of the weighting of the entire index.
The telecoms sector, which is widely regarded by investors as a safe haven in times of turmoil, was the worst performer in the bull market, up just 0.1 percent for the year.
Following such a strong year, 2010 is not likely to be as kind to investors, said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.
"This is going to be a very hard act to follow and pretty much all of the easy gains have been made," he said.
"I think investors are going to turn more discerning and more sort of rational next year. We may see a modestly up year, but I think it's going to be challenging."
Canadian markets will be closed on Friday, January 1.
Reporting by John McCrank; editing by Peter Galloway