July 25, 2008 / 3:37 PM / 11 years ago

UPDATE 1-Toronto stocks gain as resources, banks climb

(Updates to midmorning)

*TSX gains in choppy morning action

*Financials and resources rise after Thursday’s decline

*Loblaw falls on its second-quarter results

TORONTO, July 25 (Reuters) - The Toronto Stock Exchange’s main index pushed higher in choppy action on Friday, helped by resource shares, which climbed despite soft commodity prices.

Financial-services shares climbed on bargain-hunting following a steep selloff on Thursday. Royal Bank of Canada (RY.TO) added 1.2 percent.

Resource shares were among the biggest gainers by weight, including Potash Corp of Saskatchewan POT.TO, which rose 5.2 percent. Potash Corp boosted its 2008 forecast on Thursday, and said it tripled its second-quarter earnings.

Joe Ismail, technical analyst at Maison Placements Canada, said the day was likely to remain choppy.

“The financials are cheap, to be blunt about it,” said Ismail. “(Investors) might not get back in in full force - they will probably try to pick and choose which banks they would like to play.”

The S&P/TSX composite index .GSPTSE was up 90.81 points, or 0.69 percent, at 13,296.95, after earlier falling as low as 13,157.88. Seven of its 10 main sectors were higher.

On the downside, shares of Canada’s biggest supermarket chain Loblaw Cos (L.TO) fell 70 Canadian cents, or 2.3 percent, to C$29.67 after the company said second-quarter profit fell after one-time charges were stripped out, hurt by weaker-than-expected sales growth.

Financials rose 0.6 percent, while Bank of Nova Scotia (BNS.TO) was up 64 Canadian cents, or 1.3 percent, at C$48.80, and Royal Bank gained 54 Canadian cents to C$44.77.

The energy sector gained 0.6 percent, even as the price of oil fell as low as $122.50 a barrel, a seven-week low. EnCana (ECA.TO) rose C$1.15, or 1.6 percent, to C$74.56, and Nexen NXY.TO was up 86 Canadian cents, or 2.8 percent, at C$31.86.

Oil prices have lost more than $20 in the past two weeks, which has helped pull the Toronto market’s heavyweight energy sector lower. Concerns over dampening demand as oil remains at relatively high prices have also hurt the sector.

Ismail noted that the recent drop in energy shares has put them in oversold territory, making the stocks due for a bounce back.

The materials sector also supported the index, gaining 1.4 percent. Fording Canadian Coal Trust FDG_u.TO was up C$2.81, or 3.6 percent, at C$80.21, and Potash Corp added C$10.15 to C$207.00. ($1=$1.02 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)

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