March 13, 2009 / 9:10 PM / 10 years ago

CANADA STOCKS-TSX rides gold-miners, banks to higher close

* Index rises 21.12 points to 8,303.39

* Gold-mining shares behind latest TSX gain

* TSX ends week with gain of 9.4 percent (Adds details and comments)

By Frank Pingue

TORONTO, March 13 (Reuters) - Toronto’s main stock index ended a volatile session with a slight gain on Friday as shares of gold-miners rallied around higher bullion while financials continued to take comfort on news that the U.S. banking sector is finding stability.

After a massive three-day rally where the index surged 9.5 percent, investors decided to take their foot off the gas pedal in the latest session.

But a push higher by gold-mining stocks was enough to carry the overall index a slim gain as a weaker U.S. dollar helped boost demand for the yellow metal.

Gold XAU= also firmed to around $928 an ounce on a combination of technical buying and fears that a Swiss example would lead to a series of currency devaluations.

Goldcorp (G.TO) headlined the latest TSX gain as its shares rose 3.7 percent to close at C$37.84, followed by Barrick Gold (ABX.TO), whose shares ended up 2.6 percent at C$37.89.

The gain paled in comparison to the triple-digit runs made in the last three sessions, but it was enough to give the index its first four-session streak of higher closes since Feb. 9.

“We didn’t see a continuation of the strength from earlier in the week,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

“But the good news is we did not see a return to a lot more negative sentiment which easily could have happened because I don’t think the underlying fundamentals have changed enough to be confident that people are going to stay positive.”

The higher close followed Canadian data that showed the economy shed a bigger-than-expected 82,600 jobs in February, which was the latest reminder that the domestic economy is deteriorating. [ID:nN13433946]

The S&P/TSX composite index .GSPTSE closed up 21.12 points, or 0.26 percent, at 8,303.39. During the session it rallied as much as 0.8 percent and dropped as much as 1.2 percent.

For the week, the index rose 9.4 percent.

Another key driver behind the index’s gain came from the influential financials index, which ended 0.92 percent higher as several top U.S. bank executives suggested this week that the industry is stabilizing.

The comments helped lift shares of Royal Bank of Canada (RY.TO) 1.3 percent to C$35.44, and insurer Sun Life Financial (SLF.TO) by 2.5 percent to C$20.46.

A big reason why the broader index did not add considerably to its recent gains was the 0.76 percent drop in the energy group as bearish demand forecasts outweighed the potential for OPEC agreeing to production cut at its weekend meeting.

That news shook the energy sector and its key members like Canadian Natural Resources (CNQ.TO), which fell 1.3 percent to C$42.54, and Nexen Inc NXY.TO, which closed 2.5 percent lower at C$18.16.

After touching its lowest level in more than five years last week, investors have started to show signs of racing back into the TSX at any sniff of good news.

Still, sentiment is fragile and some experts say the TSX’s performance this week should not be considered the start of a return to the lofty levels it enjoyed before the global financial market meltdown started.

Also likely to play in the mix is key Canadian data due next week, notably the February consumer price index data on Thursday and the January retail trade data on Friday.

“We are going to continue to see the market grasp at straws and as a result a lot of volatility with very little direction,” said Warne. “So we’re going to see alternating days and alternating weeks as the sentiment shifts back and forth.”

$1=$1.27 Canadian Editing by Jeffrey Hodgson

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