* TSX swings higher after dropping nearly 1 pct at open
* Bank of Montreal results better than expected
* U.S. consumer confidence makes biggest gain in 6 years
By Ka Yan Ng
TORONTO, May 26 (Reuters) - Toronto’s main stock index rose more than 1 percent on Tuesday morning as the index’s financial group strengthened on better-than-expected Bank of Montreal (BMO.TO) results and U.S. consumer confidence data that showed the biggest gain in six years.
The rally in banks and the surge in U.S. consumer confidence overcame early weakness in resources that had dragged the index lower at the open.
Bank of Montreal (BMO.TO) reported a 44 percent drop in quarterly profit but profit still came in slightly ahead of expectations, and prompted the financials group to rise 2.5 percent. [ID:nN26473895]
BMO rose 3.1 percent to C$42.83. It also fired up all the other major banks, with Royal Bank of Canada (RY.TO) up 3.24 percent at C$44.01, leading all advancing index movers.
Bank of Nova Scotia (BNS.TO) added 3 percent to C$37.89, while Toronto-Dominion Bank (TD.TO) gained 2.6 percent to C$50.34. CIBC (CM.TO) rounded out the big banks group with a 2.98 percent gain to C$57.44.
“The main theme in Canada this week is financials. We’re off to a good start,” said Steve Ibel, institutional equities trader at Beacon Securities in Halifax, Nova Scotia.
Canada’s banks, ranked as the soundest in the world by the World Economic Forum, are expected to report another profitable quarter this week, defying global trends, as this year’s market bounce will likely offset rising loan losses and thin income from interest and fees. [ID:nN22381048]
At 10:55 a.m. (1455 GMT), the S&P/TSX composite index .GSPTSE was up 140.54 points, or 1.4 percent, at 10,210.04. Nine of the index’s 10 main groups were higher.
The index began the session nearly 1 percent lower, taking a cue from overseas stock markets, which fell as tension about North Korean nuclear tests added to questions over the global economic outlook. Wall Street also opened lower. [MKTS/GLOB]
But equity markets on both sides of the border got a boost from the U.S. consumer confidence figures, which soared in May to their highest level in eight months. [ID:nN26484791]
That was enough to lift the energy group into positive territory, up 0.92 percent, even as the price of oil remained under pressure ahead of expectations an OPEC meeting later this week would keep the producer group’s output unchanged. [ID:nSYD496746].
The materials group edged higher, up 0.2 percent, but gains were limited by a softer price for gold. [ID:nLQ684638] Barrick Gold (ABX.TO) led movers to the downside, off 2.7 percent at C$41.64.
$1=$1.12 Canadian Editing by Peter Galloway