February 12, 2008 / 3:38 PM / 11 years ago

UPDATE 1-Banks boost Toronto stock index

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TORONTO, Feb 12 (Reuters) - Toronto stocks rose as financial shares were lifted by a possible rescue plan for bond insurers, while resource shares shrugged off weak results from Teck Cominco TCKb.TO and Fording Canadian Coal FDG_u.TO.

By mid-morning the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 58.40 points, or 0.4 percent, at 13,189.32. This follows Monday’s rise of about 140 points.

“The market is very sensitive to pieces of news during the course of the day,” said Paul Hand, managing director at RBC Capital markets. “Canada is higher on the back of the U.S., but it’s a mixed bag so we’ll see where we end up.”

All 10 of the TSX index’s advanced, including heavily weighted financial shares, which gained 0.8 percent, and the consumer staples index which rose 1.4 percent. Materials shares were up 0.5 percent.

Bank shares rose on news that billionaire investor Warren Buffett had made a pitch to the three largest bond insurers to reinsure $800 billion in municipal bonds.

The country’s biggest banks rose including Bank of Nova Scotia (BNS.TO) which gained 40 Canadian cents to C$48.72 and Royal Bank of Canada (RY.TO) which rose 37 Canadian cents to C$51.30.

Home Capital (HCG.TO) added C$1.36 to C$39.29 after it reported strong fourth-quarter results and boosted its dividend.

Industrials shares were buoyed by the country’s top railways. Canadian National Railway (CNR.TO) added 75 Canadian cents to C$52.31 and Canadian Pacific Railway (CP.TO) rose 13 Canadian cents C$70.20.

Resource shares were mixed with Teck Cominco off 39 Canadian cents at C$34.16 and Fording Canadian down C$1.00 at C$44.99.

Fording said its fourth-quarter profit fell on lower realized coal prices, but the company said metallurgical coal looks stronger on the horizon.

Teck Cominco said on Monday its fourth-quarter profit dropped 68 percent, hit by lower zinc and coal prices, the stronger Canadian dollar and C$84 million in one-time charges.

But fertilizer producers including Potash Corp POT.TO, which added C$6.63 to C$150.90 and Agrium Inc AGU.TO, which rose C$1.95 to C$65.52, underpinned gains on the index. ($1=$1.00 Canadian) (Reporting by Scott Anderson; Editing by Bernadette Baum)

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