* TSX ahead 113.96 points at 9,240.11
* Banks and energy issues lead turnaround (Adds details and comments)
By Frank Pingue
TORONTO, April 21 (Reuters) - Toronto’s main stock index clawed back from an early drop and was up more than 1 percent on Tuesday afternoon as financials and energy shares combined to lead the rebound.
Teck Cominco TCKb.TO also helped fuel the rally as its shares shot 32 percent higher to C$12.02 after the miner said it had reached an agreement to defer debt payments due in 2009. [ID:nBNG474486]
The financials index led all sectors higher with a gain of 2.5 percent, while the energy group followed with a gain of 2 percent. Eight of the TSX’s 10 main sectors were higher.
At 12:45 p.m. (1645 GMT), the S&P/TSX composite index .GSPTSE was up 113.96 points, or 1.25 percent, at 9,240.11. Earlier it had fallen as much as 1.2 percent.
Shares of Canadian banks followed their U.S. counterparts higher after U.S. Treasury Secretary Timothy Geithner said the majority of banks have more capital than they need in order to be considered well capitalized. [ID:nN21535633]
“There’s a feeling that if you want to play the market you want to be in the banks,” said Irwin Michael, portfolio manager at ABC Funds. “There is still a lot of cash on the sidelines and, when in doubt, if you buy a bank you are not scrutinized as much because the banks are relatively liquid.”
The turnaround in the energy group was aided by the price of oil, a key Canadian export, which pared early losses and moved back above $46 a barrel. [ID:nSP465475]