June 18, 2012 / 3:28 PM / 7 years ago

CANADA STOCKS-TSX edges higher, Europe worries persist

* TSX up 15.08 pts, or 0.1 pct, at 11,539.98
    * Financial shares climb after Greek vote
    * Higher Spanish, Italian bond yields curb optimism

    By Jon Cook
    TORONTO, June 18 (Reuters) - Toronto's main stock index rose
on Monday after a victory for Greece's pro-bailout parties
lifted financial shares but gains were pared by investor worries
about rising bond yields in Spain and Italy.
    Greek voters gave a majority to parties supporting the
country's economic bailout on Sunday, easing worries about
Greece being forced out of the euro zone and boosting risk
    Nearly all of Canada's 10 main sectors were higher, led by
the financial group, which climbed 0.1 percent.
    Gains were driven by Canada's major lenders, with Royal Bank
of Canada rising 0.8 percent to C$51.63,
Toronto-Dominion Bank up 0.4 percent to C$79.33, and
Bank of Nova Scotia climbing 0.6 percent to C$52.30.
    With uncertainty persisting about Europe, Canadian investors
were focusing on safer bets that produced healthy dividends,
said Sid Mokhtari, market technician and director of
institutional equity research for CIBC World Markets. 
    "Money is definitely going after what's been very
thematically important for both the U.S. and Canada and that's
your yield market," said Sid Mokhtari, market technician and
director, institutional equity research, CIBC World Markets.
    Canada's small defensive healthcare sector also rose 1.8
percent, led by drugmaker Valeant Pharmaceuticals International
Inc, which jumped 4 percent to C$47.78. On Friday,
Valeant said it will buy privately held drugmaker OraPharma for
about $312 million, to enter the dental market. 
    At 11:13 a.m. (1513 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 15.08 points, or 0.1
percent, at 11,539.98 after initially falling.
    However, the Greece-driven relief rally showed signs of
fading, as investors worried about the far-larger economies of
Spain and Italy. On Monday, Spanish bond yields hit a new
euro-era high above 7.0 percent, a level considered
unsustainable. Italian bond yields also jumped. 
    "People are more concentrated on what's after Greece and now
they're talking about the Spanish and Italian markets," said
Mokhtari. "No one wants to make a directional bet, that's why
volume is pretty tame and on the lighter side."
    Investors were also looking ahead to this week's Federal
Reserve policy meeting, which starts on Tuesday, and the chances
of fresh action to stimulate flagging growth.
    "Everyone is going to wait to see what the Fed says, if its
going to extend Operation Twist in the U.S. or not," said
    In other news, shares of Research in Motion Ltd 
 slid 1.5 percent to C$11 after contract electronics
manufacturer Celestica Inc said it will stop making
products for the struggling BlackBerry maker, its largest
customer, over the next three to six months as the BlackBerry
maker shrinks its global supply base.
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