November 11, 2009 / 1:22 PM / 8 years ago

TSX clings to gain as China data offers hope

TORONTO (Reuters) - Toronto’s main stock index finished slightly higher on Wednesday in a quiet session marked by an early jump to a three-week high that eroded as the day progressed.

<p>People walk by a Bay Street sign at the financial district in Toronto, October 10, 2008. REUTERS/Mark Blinch</p>

Advances by banks and Potash Corp, helped by an encouraging economic report from China, overpowered a drop in the energy group that took the index lower, briefly, just before the close.

Potash Corp led all gainers, up 1.8 percent at C$106.52, followed by several big banks. Bank of Nova Scotia rose 1.1 percent to C$47.82 to lead the banks, while Royal Bank of Canada gained 0.63 percent to C$57.18.

The index shot up more than 100 points from the get-go as oil prices firmed above $79 a barrel after Chinese factory output data signaled the world’s third-largest economy has put the worst of the global financial crisis behind it.

“The market got excited out of the gate this morning based on the strong China story and the weak U.S. dollar, but then it faded,” said Francis Campeau, broker at MF Global Canada in Montreal.

“We’re at technical resistance in both Canada and U.S.”

The S&P/TSX composite index closed up 13.01 points, or 0.11 percent, at 11,439.75.

Gold-mining stocks played a role in the TSX index’s gains as the gold price hit a record high near $1,120 an ounce as the U.S. dollar tumbled.

Kinross Gold rose nearly 1 percent to C$20.50.

On the downside, Suncor Energy flipped to being one of the biggest drags on the index after being the most influential gainer early on. It fell 0.33 percent to C$36.74. Shares of fellow oil company EnCana dropped 1.3 percent to C$60.70.

The price of crude slipped during the session, taking energy shares down as well, as the U.S. dollar recovered in a technical rebound. The oil price then resumed its push higher later in the day but appetite for oil and gas group didn‘t.

Shares of Shoppers Drug Mart, Canada’s biggest pharmacy chain, dropped 1.55 percent to C$43.79 as investors looked past a higher quarterly profit and worried about impending legislative reforms in the province of Ontario.

CAE fell 2.8 percent to C$8.75 after the flight simulator maker and aviation training company posted a lower quarterly profit.

MF Global’s Campeau said activity was lower than usual due to absent market players. The Canadian bond market and government offices were closed on Wednesday for Remembrance Day.

Editing by Peter Galloway

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