TSX jumps on Scotiabank results, China spending

TORONTO (Reuters) - Canada's main stock index rose on Tuesday, boosted by a jump in profit and a dividend increase by Bank of Nova Scotia and by China's announcement of record government spending this year, which helped lift commodity prices.

Along with China's spending plans, which were expected to sustain the country's economic growth, the market was encouraged by signs that the world's top central banks are likely to stick to their easy monetary policies. On Wall Street, the Dow Jones industrial average surged to a record high on Tuesday, breaking through levels last seen in 2007.

"There's a bit of a snap-back in the market. It's a reaction to the downward pressure we've seen lately," said Michael Sprung, president of Sprung Investment Management.

"Investors are trying to cautiously look for places to come back into the market," he added.

The Toronto Stock Exchange's S&P/TSX composite index <.gsptse> was up 102.81 points, or 0.81 percent, at 12,810.22. Nine of its 10 main sectors were higher. The index had fallen in the two previous sessions.

Scotiabank, Canada's third biggest lender, said quarterly profit rose 13 percent, driven by acquisitions at home and abroad. Its shares were up 1.2 percent at C$61.62.

Its results capped off a week of stronger-than-expected quarterly reports from Canada's top banks, which in many cases used lower loan-loss provisions, cost-cutting, and stronger international revenue to offset slower growth in domestic consumer lending.

"The banks have shown themselves to be pretty good financial shape from the capital point of view. They expressed some confidence in that by increasing their dividends," Sprung said.

Scotiabank raised its dividend by 5 percent, following similar increases by most of the country's Big Six banks.

Financials, the index's weightiest sector, were up 0.7 percent. In the sector, Canadian Imperial Bank of Commerce rose 0.9 percent to C$83.70, and Toronto-Dominion Bank gained 0.4 percent to C$85.42.

The materials sector, which includes mining stocks, was up 1.1 percent, with fertilizer producer Potash Corp rising 1.9 percent to C$41.02.

($1=$1.03 Canadian)

(Additional reporting by Cameron French and Peter Galloway)

Source: http://news.yahoo.com/tsx-may-open-higher-c-banks-seen-keeping-132032795--finance.html

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