December 18, 2012 / 9:58 PM / 6 years ago

CANADA STOCKS-TSX gains on US budget optimism; energy leads way

* TSX ends up 52.99 points, or 0.43 percent, at 12,334.34
    * Energy and financial shares provide biggest boost
    * Eight out of the 10 main index sectors end higher

    By Alastair Sharp
    TORONTO, Dec 18 (Reuters) - Canada's main stock index rose
on Tuesday, led higher by heavyweight financial and energy
shares as optimism swelled that U.S. talks to avoid the budget
"fiscal cliff" were making headway.
    Support for House of Representatives Speaker John Boehner
among Republican lawmakers held as both he and President Barack
Obama softened their positions in talks to avert the "fiscal
cliff" of automatic tax hikes and spending cuts set to come into
force in the new year. 
    "There seems to be between the two leaders some
rapprochement, giving hopes of some sort of agreement coming
up," said John Ing, president of Maison Placements Canada.
    Signs of progress, or lack thereof, in the U.S. talks have
prompted markets to swing widely in recent weeks as economists
have warned that failure to reach a deal could push the world's
largest economy back into recession.
    As a deal looks more likely, investors appear less concerned
by minor setbacks. "I don't think the stock market is that
concerned about it," said Paul Harris, portfolio manager at
Avenue Investment Management. "When there are signs a deal is
going to come, the market goes up a lot more."
    The energy sector, up 1.2 percent, played the biggest role
in leading the market higher, lifted by a rise in oil prices.
 In the group, Suncor Energy Inc added 1.5 percent
to C$32.65, and Canadian Natural Resources Ltd gained
2.2 percent to C$28.25.
     The Toronto Stock Exchange's S&P/TSX composite index
 ended up 52.99 points, or 0.43 percent, at 12,334.34.
Eight of its 10 main sectors ended higher. The index has gained
more than 4 percent since a mid-November low.
    Financial stocks were up 0.9 percent as investors moved into
a sector seen as relatively cheap and offering a promising yield
    Royal Bank of Canada, the country's largest lender,
added 1.3 percent to C$59.85. Toronto-Dominion Bank 
gained 1.1 percent to C$82.12, and Bank of Nova Scotia 
rose 1.1 percent to C$57.28. Insurer Manulife Financial Corp
 jumped 3.3 percent to C$13.43. 
    "Financials are doing better because the economy in Canada
and the United States is actually in pretty good shape," Harris
said. "There is a perception they are tied to the equity
markets, and the equity markets have had a decent run in the
last little while."
      The index's materials sector - which includes miners - was
the most heavily weighted declining sector, falling as the price
of bullion sank almost 2 percent, in part because its safe-haven
luster was tarnished by optimism that a budget deal will be
reached in the United States.
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