April 1, 2008 / 5:31 PM / 11 years ago

UPDATE 2-Toronto stocks climb, bank gains offset resources

(Updates trading)

TORONTO, April 1 (Reuters) - The Toronto Stock Exchange’s main index rebounded into positive territory on Tuesday, as banking sector gains offset a drop in resource issues.

The S&P/TSX composite index .GSPTSE was up 30.98 points, or 0.23 percent, at 13,381.11 in afternoon trading, as seven of its 10 main sectors advanced. It had earlier fallen as low as 13,254.04.

Banks were buoyed by news that U.S. bank Lehman Brothers Holdings Inc LEH.N had raised $4 billion in a convertible preferred stock offering to strengthen its balance sheet.

Canadian Imperial Bank of Commerce (CM.TO) was up C$2.26, or 3.4 percent, at C$68.36, and Toronto-Dominion Bank (TD.TO) added C$1.41, or 2.3 percent, to C$63.93. The sector added 1.7 percent.

Meanwhile, UBS UBSN.VX announced a $19 billion writedown on U.S. real estate and related assets, but financial shares rose on hopes that banks were starting to come clean.

“It’s a huge writedown,” said Douglas Davis, president at Davis-Rea. “It’s unbelievable, but they’re confident they can replace that money with a rights offering, so it tells me that the crisis is getting well past the half-way point.”

That showed resilience in the financial markets and helped boost confidence in the Toronto stock market, Davis said.

Share of telecom companies also lifted the key index.

Rogers Communications (RCIb.TO) jumped C$2.37, or 6.4 percent, to C$39.29 after a list of qualified bidders for an upcoming wireless spectrum auction showed no U.S. carriers so far. Rival Telus Corp (T.TO) rose C$1.73, or 3.9 percent, to C$46.43, with the sector overall up 2.6 percent.

Meanwhile, the energy and materials sectors retreated, with the price of gold tumbling to a two-month low as the U.S. dollar rose.

The materials group gave up 2.2 percent while its subindex of gold producers shed 3.1 percent. Goldcorp (G.TO) was down C$1.67, or 4.2 percent, at C$38.22, and Barrick Gold (ABX.TO) lost C$1.69, or 3.8 percent, to C$43.19.

The oil and gas sector fell 0.6 percent, even as the price of U.S. light crude oil recovered after earlier being caught up in a wider commodities selloff. Suncor Energy (SU.TO) slid 63 Canadian cents, or 0.6 percent, to C$98.58.

$1=$1.03 Canadian Reporting by Leah Schnurr; Editing by Bernadette Baum

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