January 25, 2010 / 10:31 PM / 9 years ago

CANADA STOCKS-TSX helped higher by reviving financials

* S&P/TSX composite up 0.1 percent at 11,354.51

* Financials recoup some of last week’s losses

* Gold shares drop (Adds details, quotes)

By Ka Yan Ng

TORONTO, Jan 25 (Reuters) - Toronto’s main stock index ended little changed on Monday as beaten-down financial and energy shares found investor interest, but falling golds limited the gains.

Four of the country’s five biggest banks rose on Monday, picked up by bargain-hunters after falling much of last week, even as some uncertainty over U.S. President Barack Obama’s plan to rein in big U.S. banks lingered.

Toronto-Dominion Bank (TD.TO) topped all heavyweight gainers, rising 1.15 percent to C$62.46, while Bank of Montreal (BMO.TO) rose 0.9 percent to C$52.65, and Canadian Imperial Bank of Commerce (CM.TO) climbed 0.55 percent to C$64.08.

Bank of Nova Scotia (BNS.TO) rallied 1.08 percent to C$45.08 as Macquarie Equities Research upgraded Canada’s third largest bank to “neutral” from “underperform.”[ID:nSGE60O0KP]

Royal Bank of Canada (RY.TO) bucked the trend, and was among the heavyweight decliners, sliding 0.32 percent to C$52.71.

Meanwhile, Bank of Canada Governor Mark Carney said in an interview with the Financial Times that the U.S. plan for banks must strike a balance between preventing institutions from being “too big to fail” and the need to keep markets functioning effectively. [ID:nN25173660]

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 11.08 points, or 0.1 percent, at 11,354.51, with seven of its 10 main groups ending higher.

Doubts about the strength of the U.S. housing recovery arose after a report on Monday showed U.S. existing home sales tumbled at the fastest pace on record in December. [ID:nN25221870] The report came close to pushing the index into negative territory after it dropped 2.9 percent last week.

“Last week’s selloff did seem a little bit overdone, a little disproportionate to the overall scheme of things,” said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.

“After three straight days of declines, which I think were among the worst since the rally began in March, we are seeing buyers stepping in again and picking up some of the stocks that were hit hardest last week.”

Energy shares and non-gold materials-sector issues were also on the rise. Potash Corp POT.TO was up 0.72 percent at C$116.13, and Canadian Natural Resources (CNQ.TO) was up 0.74 percent at C$70.32.

Gold rose to near $1,100 an ounce as the U.S. dollar eased broadly and renewed physical and safe-haven buying helped support prices, but investor sentiment stayed wary. [GOL/]

Gold producers were unable to benefit from bullion’s rise. They were among the weakest heavyweight movers, led down by Barrick Gold (ABX.TO), which dropped 1.53 percent to C$38.07.

Gareth Watson, an equity advisor at ScotiaMcLeod, said that lacking any real catalyst in Canada to move the market significantly, investors are looking ahead to November GDP data for Canada and the first U.S. Federal Open Market Committee meeting of the new year, both later in the week.

Shares of home improvement chain Rona RON.TO settled 0.36 percent higher at C$16.62, after earlier touching its highest since February 2008. The company said it plans to boost earnings per share by 10 percent to 15 percent over the next two years. [ID:nN25166554]

$1=$1.06 Canadian Editing by Peter Galloway

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