CANADA STOCKS-TSX buoyed by resources, banks remain soft

Mon May 30, 2011 5:16pm EDT

   * TSX up 32.07 points, or 0.23 percent, at 13,829.66
 * Seven of the 10 main groups higher
 * Financials, utilities fall, telecoms flat
 (Adds details, comments)
 By Solarina Ho
 TORONTO, May 30 (Reuters) - Toronto's main stock index
drifted higher on Monday, as energy and materials issues
advanced in muted trade.
 Energy stocks led the way, rising 0.68 percent, with
Canadian Natural Resources (CNQ.TO) gaining 1.28 percent to
C$42.09 and Suncor Energy (SU.TO) up 0.59 percent at C$44.99.
The two issues were the most influential gainers and accounted
for 0.06 percent of the index's 0.23 percent rise.
 The materials group, which combined with the energy group
make up nearly 50 percent of the index, climbed 0.53 percent.
It was powered by fertilizer giant Potash Corp (POT.TO), which
rose 0.8 percent to C$55.13. Diversified miner Teck Resources
(TCKb.TO) was also an influential gainer, rising 1.31 percent
to C$50.98.
 Equinox Minerals EQN.TO, which saw hefty declines on
Friday after news that Zambia gave the green light for Barrick
Gold (ABX.TO) to take over the copper producer, rebounded 4.47
percent to C$7.94.
 Uranium producers, however, were under pressure after
Germany said it plans to shut all its nuclear reactors by 2022,
a policy reversal drawn up in a rush after the Fukushima
nuclear disaster in Japan. [nN30251640]
 Cameco Corp (CCO.TO) was the most influential decliner,
dropping 3.32 percent to C$27.36, while Uranium One Inc
UUU.TO fell 2.63 percent to C$3.70.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE finished the session up 32.07 points, or 0.23
percent, at 13,829.66. Seven of the 10 main groups were in
positive territory. Telecoms ended the session flat.
 The index popped higher toward the close after spending
much of the afternoon languishing near the unchanged mark.
Trade was quiet with both U.S. and UK markets closed for
holidays.
 "The bottom line, investors are still waiting to take their
cue from what happens in the U.S. tomorrow (when markets
reopen)," said Elvis Picardo, an analyst and strategist at
Global Securities.
 "I guess we're waiting to see the next catalyst that will
get us moving one way or the other."
 The U.S. is expecting data including the Chicago PMI on
Tuesday, while the Bank of Canada will announce its next
interest rate decision. The central bank is widely expected to
hold rates at 1 percent. [ID:nN27269933]
 After hitting a two-month low more than two weeks ago, the
TSX composite index has since recovered about 4 percent.
 "We're continuing the recent trend where Canada has been
strong over the last roughly two weeks," said Francis Campeau,
a broker at MF Global Canada in Montreal. "But we're talking
very low volumes."
 Most of Canada's biggest banks ended the session lower,
dragging the financial index down 0.06 percent.
 Royal Bank of Canada (RY.TO) and Toronto-Dominion Bank
(TD.TO) were among the most influential movers on the downside,
with RBC slipping 0.45 percent to C$57.10 and TD off 0.36
percent at C$83.24.
 The slide continued a recent retreat by financial issues
following weaker than expected earnings and expectations the
banks are heading into a tougher part of the business cycle as
tighter lending rules and the prospect of higher interest rates
depress consumer borrowing. [ID:nN26238530]
 "Investors have been accustomed to regular earnings ...
where Canadian banks beat earnings estimates with monotonous
regularity," said Picardo.
 "It's unusual to find two or three banks missing estimates
in the same week, so there's certainly seems to be some
lingering disappointment on that front."
 Fortis Inc (FTS.TO) also made a notable retreat on the
index, pulling the utilities group down 1.09 percent. The
largest investor-owned distribution utility in Canada dropped
2.05 percent to C$32.97, after it said it has agreed to buy a
Vermont utility for US$470 million, plus debt, and announced a
C$300 million bought deal offering. [nN30231534]
 Early positive sentiment was also lifted by data that
showed Canada's economy picked up in the first quarter,
expanding at its fastest pace in a year as businesses ramped up
investment and rebuilt inventories. However, economists warned
the growth spurt would not last long. [nN30235278]
 "Coming out of the gate, we tried to get some traction from
the economic numbers, but it wasn't really a big mover," said
Picardo.
 ($1=$0.98 Canadian)
 (Additional reporting by Ka Yan Ng; Editing by Rob Wilson)







































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