* TSX up 13.68 points, or 0.13 percent, at 10,700.51
* Materials group rises 0.5 pct on recovery sentiment
* Financials up 0.3 pct ahead of bank results next week (Adds details, quotes)
By Jennifer Kwan
TORONTO, Aug 20 (Reuters) - Toronto’s main stock index edged up to a higher close on Thursday as commodity-related shares rose following a rally in Chinese stocks, which helped to soothe investor worries about the pace of economic recovery.
The index’s materials group led the advance with a 0.5 percent gain. In the group, fertilizer producer Potash Corp of Saskatchewan POT.TO was up 0.8 percent at C$105.29, and miner Teck Resources TCKb.TO climbed 2.6 percent at C$28.39.
Adding support, the heavily weighted financial group rose 0.3 percent ahead of quarterly results from Canada’s big banks next week.
“People are setting up the Canadian banks for the earnings next week,” said Gareth Watson, Canadian equity advisor in ScotiaMcLeod’s portfolio advisory group. He said the rise in the bank group is “based on the expectations earnings are going to be better than expected”.
Royal Bank of Canada (RY.TO), a top heavyweight advancer, was up 0.6 percent at C$50.89, while Bank of Nova Scotia (BNS.TO) climbed 1.2 percent to C$44.89.
The financial group also got a boost from lingering optimism about recovery following reassuring North American data this week, said Elvis Picardo, analyst and strategist at Global Securities in Vancouver. [ID:nN20525681]
“The economic numbers that have been coming out this week continue to confirm that the U.S. and Canada are emerging from recession,” he said.
The S&P/TSX composite index .GSPTSE rose 13.68 points, or 0.13 percent, to close at 10,700.51, with three of its 10 main groups higher.
Oil prices were steady, settling 12 cents higher at $72.54 a barrel after rising sharply in the previous session, but individual names in the index’s energy sector were mixed. Suncor Energy (SU.TO) dropped 1.2 percent at C$34.48.
The firmness in oil prices was seen adding support to the materials group.
“Usually when oil prices move they do tend to influence the entire commodities complex. I think perhaps there’s a bit of a follow on with that today,” Watson said.
The materials sector was also influenced by improved sentiment after Chinese stocks .SSEC rose 4.5 percent on Thursday, easing concerns about a nearly 20 percent descent in China’s equity markets over the past couple of weeks.
Watson said it was a fairly lackluster day on the market.
“I would chalk it up to a market trying to move higher but finding difficulty doing so, probably because it’s overextended in the first place,” he said.
The market is up some 40 percent from its March lows.
Gold prices were weaker but shares of gold miners were up with the rest of the materials group. Goldcorp (G.TO) was up 0.2 percent at C$38.40, and Agnico-Eagle (AEM.TO) rose 1 percent to C$60.31.
Among the most influential movers on the downside was Bombardier (BBDb.TO) which fell 3.9 percent to C$3.98 after it terminated a large Learjet contract with Jet Republic after the airline declared insolvency. [ID:nN20509344]
That weighed on the index’s industrials group, which slipped 0.8 percent.
The blue chip S&P/TSX 60 index .TSE60 closed 0.22 of a point higher, or 0.03 percent, at 643.74.
($1=$1.09 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)