September 23, 2008 / 2:40 PM / 10 years ago

UPDATE 1-Toronto stocks rise broadly, led by oils, banks

*Financials rise as Bernanke, Paulson to talk to Congress

*Materials sector slumps as base metals prices fall

*Fairfax rises on report it looking at AIG assets

(Adds details)

TORONTO, Sept 23 (Reuters) - The Toronto Stock Exchange’s main index was higher on Tuesday morning due to strength in energy and financial stocks ahead of key congressional testimony on the $700 billion U.S. financial bailout plan.

The architects of the rescue plan, U.S. Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson, were set to urge Congress on Tuesday to act quickly to buy up billions of tainted mortgage assets. [ID:nN13574113]

As well, markets digested the possible sale of Lehman Brothers Holdings Inc’s LEHMQ.PK European arm, seen as the next step in Wall Street’s makeover.

Shortly after the open, the S&P/TSX composite index .GSPTSE was up 90.98 points, or 0.72 percent, at 12,729.05, climbing from a slightly lower open. All but one of its 10 main groups were higher.

The rise comes after a 2 percent tumble on Monday, as worries over the effectiveness of the bailout plan seized the market.

The heavily-weighted financial services sector rose 2.4 percent. Toronto-Dominion Bank (TD.TO) was up 1.2 percent at C$63.31 after reports that TD has joined other suitors for all or part of Washington Mutual Inc (WM.N). [ID:nN23324475]

Fairfax Financial Holdings Ltd (FFH.TO) jumped 4.5 percent to C$334.48 after the Globe and Mail reported on Tuesday that Fairfax is looking into American International Group Inc’s (AIG.N) Canadian property and casualty operations, as well as some businesses in Europe where it’s currently looking for expansion.

Canadian insurers Manulife Financial Corp (MFC.TO) and Sun Life Financial Inc (SLF.TO) are also scouring AIG’s businesses for potential acquisition opportunities, the newspaper said.

The heavyweight energy sector was up 1.3 percent, even as oil eased due to doubts over the U.S. financial bailout plan after a record one-day rise on Monday. [ID:nSYD221917] Canadian Natural Resources (CNQ.TO) rose 2 percent C$86.25.

The resource-laden materials sector was the lone group in negative territory, down 2.6 percent, amid weakness in base metal prices. [ID:nLN408202]. First Quantum Minerals (FM.TO) fell 5.4 percent to C$46.83. ($1=$1.03 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)

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