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(Reuters)
TORONTO (Reuters) - The TSX was higher by late afternoon on Thursday, as investor optimism buoyed financial issues, after the Bank of Canada said the Canadian economy was recovering faster than expected.
But the central bank, which fleshed out its upgraded growth forecasts for the third and fourth quarters, also cautioned the economy faces a number of risks, including a weak U.S. economy and a Canadian dollar that seems set to stay strong.
Nonetheless, investors took the opportunity to pile into banks and insurance issues, with all five big Canadian banks in the top 10 notable advancers.
The charge higher was led by Royal Bank of Canada , up 1.65 percent at C$56.53, followed by Toronto-Dominion Bank , up 2.01 percent at C$65.49.
"The move up is being led by financials. They are the major beneficiaries of the Bank of Canada's Monetary Policy Report today," said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.
"It gives the market confidence to know that the bank is endorsing the economic recovery. Financial stocks are heavily leveraged to the Canadian economy."
At 3:35 p.m., the S&P/TSX composite index was up 79.48 points, or 0.69 percent, at 11,521.50.
Earlier in the session, the index had fallen sharply on weakness in oil prices and after Potash Corp reported a lower quarterly profit.
(Reporting by Ka Yan Ng; editing by Rob Wilson)
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