February 26, 2009 / 10:28 PM / 10 years ago

CANADA STOCKS-TSX higher for third straight day on oils, banks

* TSX closes up 3.21 percent at 8,186.62

* Financial sector rallies on upbeat bank results

* Energy group higher as crude jumps 6 percent (Adds details, quotes)

By Jennifer Kwan

TORONTO, Feb 26 (Reuters) - Toronto’s main stock index climbed on Thursday for a third straight session in a rally sparked by better than expected bank earnings and stronger oil prices.

Financials and energy stocks were among the biggest contributors to the index’s rise, with Royal Bank of Canada (RY.TO) up 6.4 percent at C$31.90, and Suncor Energy (SU.TO) up 11 percent at C$25.66.

The financial sector rose 6.2 percent and the energy group was up 4.4 percent.

Three of the country’s largest banks — Royal Bank, Canadian Imperial Bank of Commerce (CM.TO) and National Bank of Canada (NA.TO) — reported quarterly profits that were hit hard by market-related charges, but underlying results excluding one-time items beat street expectations. [ID:nN26542233]

“The Canadian banks have shown performance that was actually better than expected,” said Rick Meslin, head of Canadian equities at UBS.

“Clearly, banks have been very, very strong today following some of the positive earnings reports.”

CIBC rose 6.1 percent to C$45.91, and National Bank climbed 9.7 percent to C$37.69.

“When you see people kind of meeting or beating consensus in big sectors that have been sold down you kind of have this prejudice to want to cover your shorts and get long,” added Meslin.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE rose 254.52 points, or 3.21 percent, to 8,186.82, with eight of its 10 main groups higher. Consumer staples issues slid 0.4 percent and information technology shares dropped 0.3 percent.

It is the third straight session of gains for the benchmark index, which has drawn support from a recent rally in beaten-down financial stocks, said Bruce Latimer, a trader at Dundee Securities.

“The banks came up with some good numbers, oil is up $2 and there’s some bottom-fishing going on in the golds. You’ve got strength across the market,” he said.

The price of oil settled $2.72 or 6.4 percent higher at $45.22 a barrel [ID:nSIN102835], helping to support EnCana (ECA.TO), up 1.6 percent at C$48.88, and Canadian Natural Resources (CNQ.TO), up 5.2 percent at C$41.66.

Torstar Corp (TSb.TO) shares sank 5.3 percent to C$6.05 after the book and newspaper publisher posted a quarterly loss, slashed its dividend and said its chief executive was stepping down. [ID:nBNG429814]

Also on the downside were Research In Motion RIM.TO, off 4 percent at C$49.82, and Agrium Inc AGU.TO, which dropped 4.8 percent to C$43.80.

The blue chip S&P/TSX 60 index .TSE60 closed 16.01 points higher, or 3.35 percent, at 493.86.

$1=$1.25 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson

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