February 23, 2009 / 3:17 PM / 9 years ago

CANADA STOCKS-TSX rises as key bank issues rally

* TSX rises but off early gain of more than 1 percent

* Weighty bank shares lead index

* Higher oil prices push up energy shares

By Frank Pingue

TORONTO, Feb 23 (Reuters) - Toronto’s key stock index was slightly higher at mid morning on Monday as key bank shares rose alongside their U.S. counterparts, while energy issues were boosted by a rally in oil prices.

Reports that the U.S. government could end up with a big stake in Citigroup’s C.N common stock, a sign it is ready to avert further paralysis of the financial system, gave a lift to the influential Canadian financial sector [ID:nSP428876].

“The U.S. government is indicating that they are going to try and help out banks, and saying they need a banking system, so that put a little bit of a pulse in some of the Canadian banks here,” said Bruce Latimer, trader at Dundee Securities.

“And there’s not a lot of news out so far today, but at least the market is seeing an absence of bad news, which is a good thing.”

The financial sector, which accounts for about a third of the TSX’s key index, led all groups with a 2.6 percent gain, followed by a 1 percent rally in the energy sector.

At 10:05 a.m. (1505 GMT), the S&P/TSX composite index .GSPTSE was up 39.75 points, or 0.5 percent, at 7,983.61 Earlier, it had rallied as much as 1.03 percent.

Shares of Toronto-Dominion Bank TD.TO were up 3.4 percent at C$34.37, while Bank of Nova Scotia BNS.TO shares rose 3.4 percent to C$25.73.

In the energy group, shares of Canadian Natural Resources CNQ.TO were up 2.3 percent at C$39.16.

$1=$1.25 Canadian Reporting by Frank Pingue; editing by Peter Galloway

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