CANADA STOCKS-TSX nears 1-week high on RBC results, U.S. hopes

Thu Nov 29, 2012 5:16pm EST

* TSX ends up 62.52 points, or 0.5 percent, at 12,202.85
    * All 10 index sectors advance
    * Royal Bank of Canada up 0.5 pct on earnings
    * RIM up 4.4 percent after Goldman Sachs upgrade

    TORONTO, Nov 29 (Reuters) - Canada's main stock index hit
its highest level of the week on Thursday as financial shares
rose on Royal Bank of Canada's strong quarterly
earnings, and as optimism increased that a deal will be reached
to avert the U.S. fiscal crisis.
    Financials were up 0.8 percent, with RBC rising 0.5 percent
to C$58.61. Canada's biggest bank reported a 22 percent jump in
fourth-quarter profit on higher fixed-income trading revenue and
steady loan growth. 
    Shares of other banks rose on optimism about the strength of
the sector as the quarterly earnings season for banks continues.
    Toronto-Dominion Bank was the biggest heavyweight
advancer, up 1.4 percent at C$82.67, followed by Bank of Nova
Scotia, up 0.9 percent at C$55.22.
    The market was also supported by hopes that a deal would be
reached to avert the U.S. fiscal crisis and positive housing
data from the United States, Canada's biggest trading partner.
 
    "It is a broad risk rally, fueled primarily by greater
optimism on the U.S. fiscal (crisis). The market is sensing
signs of progress on the negotiations," said Fergal Smith,
managing market strategist at Action Economics.
    However, trading was choppy on conflicting comments from
Washington on the progress of negotiations on averting the
"fiscal cliff": $600 billion in tax hikes and spending cuts that
analysts warn could push the U.S. economy back into recession.
 
    The Toronto Stock Exchange's S&P/TSX composite index
 ended up 62.52 points, or 0.51 percent, at 12,202.85.
Earlier in the session, the index hit 12,227.52, its highest
level since Nov. 23. All the 10 main sectors on the index traded
higher. Energy shares climbed 0.5 percent and materials edged up
0.1 percent.
    Portfolio managers and investment strategists say the
combination of healthy Canadian bank earnings and some
encouraging global economic data could help the Toronto index
extend gains further before the end of the year.
    Global growth is currently being held back by a slowdown in
Asia and the lingering European economic weakness, Smith said.
"As some of these issues get resolved, it's bullish for
commodities, and bullish for the TSX." 
    Other big movers on the upside included Research In Motion
, which jumped more than 4 percent to C$11.48 after
Goldman Sachs upgraded the stock ahead of the release of the
company/s BlackBerry 10 device lineup. 
    "RIM has had a nice rally. It could be setting us up for a
very big disappointment with the new BlackBerry 10. Or it may be
a turnaround story," said John Kinsey, portfolio manager at
Caldwell Securities.
    Canadian clothing maker Gildan Activewear Inc rose
2.7 percent to C$33.98 after reporting an 84 percent jump in
quarterly profit, raising its dividend, and forecasting
current-quarter earnings above analysts' expectations.
 
    Shares of Air Canada were up 1.7 percent at C$1.80
after Canada's biggest airline unveiled a major expansion in its
flights to Asia as it seeks to boost revenue. 
    Inmet Mining Corp rallied nearly 6 percent to
C$65.50 a day after rejecting a hostile takeover bid by First
Quantum Minerals, which was down 2.1 percent at C$20.37.
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