October 26, 2011 / 9:09 PM / 7 years ago

CANADA STOCKS-TSX ends higher on firm earnings, Europe hopes

* TSX ends up 76.31 points, or 0.63 pct, to 12,186.06

* Euro zone to plan leverage bailout fund helps sentiment (Updates with details, comments)

By Jon Cook

TORONTO, Oct 26 (Reuters) - Canadian stocks staged a late rally to close higher on Wednesday, shrugging off early losses, helped by encouraging third-quarter earnings and news from Europe about plans to tackle the region’s debt crisis.

Markets responded positively to a report the euro zone will dip deeply into a $440 billion euro bailout fund, the details of which won’t be revealed until November, according to a draft statement obtained by Reuters. [ID:nL5E7LQ4Q7]

Still, analysts said the uncertainly about the outcome of the European summit was a weight on the market.

“On the one side you have the European headwinds that are negative and making the market very jittery,” said Luciano Orengo, a portfolio manager at Manulife Asset Management. “On the other side you’ve been having third-quarter earnings that are coming in better than expected.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 76.31 points, or 0.63 percent, to 12,186.06. That corrected a brief negative spell earlier in the day when the index weakened to 12,052.53.

Canadian National Railway Co (CNR.TO) among the most influential gainers, rising 1.9 percent to C$76.56, after reporting a 19 percent jump in quarterly profit late on Tuesday. [ID:nN1E79J1VA]

Energy and materials stocks, including miners, played the biggest role in leading the market higher.

Base-metal miners climbed more than 4 percent as copper prices rallied. Teck Resources TCKb.TO climbed 4.2 percent to C$37.33, while First Quantum Minerals (FM.TO) gained 8 percent to C$18.60. [MET/L]

Research In Motion RIM.TO was the biggest drag on the index, dropping 7.5 percent to C$20.89. The BlackBerry maker fell after delaying a software upgrade for its PlayBook tablet until February, months behind schedule. [ID:nN1E79P0NF]

Canadian telecoms were also down slightly, though Rogers Communications (RCIb.TO) edged up 1.15 percent to C$35.93 after reporting a slightly higher adjusted profit.[ID:nL3E7LQ1XX]

Telus Corp was hardest hit, declining 1.7 percent to C$53.79.

“The earnings are coming through ... but the common theme is people are cautious about making strong projections going forward,” said Peter Chandler, senior vice-president and director at Canaccord Wealth Management.

$1=$1.02 Canadian Additional reporting by Claire Sibonney; Editing by Jeffrey Hodgson

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