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Toronto stocks higher on strength in financials

28/08/08

TORONTO (Reuters) - The Toronto Stock Exchange's main index shot higher on Thursday, buoyed by strength in the hefty financial services sector with Royal Bank of Canada , Canada's biggest bank, delivering stronger-than-expected results.

Financials raced 2.5 percent higher with RBC up 5 percent at C$47.53. Early on Thursday, Canada's biggest bank said third-quarter profit fell 10 percent after taking C$498 million in write-downs, but the charges were lower than many had feared and underlying profit beat market expectations.

"We had three more banks reporting earnings this morning," said Fred Ketchen, director of equity trading at ScotiaMcLeod

"Obviously, they fit in very nicely with the attitude that has developed over the last couple of days. Maybe now we can see the light at the end of the tunnel."

The remainder of Canada's big banks reporting results also provided comfort.

Third-quarter net income slipped at Toronto-Dominion Bank , as a difficult capital markets environment reduced profit in its wholesale business, but the bank raised its dividend. TD rose 3.3 percent to C$61.27.

National Bank of Canada jumped 4.5 percent to C$50.67 after it said its third-quarter profit climbed on better results in its financial markets and retail banking units, as well as a gain on a Canadian exchange merger.

At midmorning, the S&P/TSX composite index <.GSPTSE> was up 100.89 points, or 0.8 percent, at 13,631.54, with seven of its 10 main groups higher.

The heavyweight energy and materials sectors, which shot up at the open, slipped 0.4 percent and 0.3 percent, respectively, as oil and gold backed off from earlier highs.

In the oil sector Suncor Energy was little changed at C$60.22 and Canadian Natural Resources fell 1 percent to C$89.36.

Agnico-Eagle rose 0.2 percent to C$60.59 and Goldcorp was up 0.6 percent at C$36.00

In individual company news, Linamar Corp , which makes precision automotive components for engines and transmissions, said it will detail about 400 layoffs later on Thursday. Linamar was up 0.4 percent at C$11.20.

Maple Leaf Foods rose 4.6 percent to C$8.67, extending gains made on Wednesday after being battered in the days following its August 17 meat recall.

The head of Canada's biggest meat processor said on Wednesday his company was fully accountable for a nationwide outbreak of listeriosis food poisoning, which has been linked to 15 deaths.

($1=$1.05 Canadian)

(Reporting by Jennifer Kwan; Editing by Scott Anderson)

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