Canadian Stocks Recover From Early Weakness To Close Modestly Higher

(RTTNews) - After coming under pressure early in the session, Canadian stocks showed a significant turnaround over the course of the trading day on Friday.

The benchmark S&P/TSX Composite Index climbed well off its worst levels of the day, eventually closing up 41.57 points or 0.2 percent at 19,501.49.

The early weakness came amid renewed concerns about the health of the banking sector, with U.S.-listed shares of Deutsche Bank (DB) moving sharply lower in early trading amid a spike by the German lender's credit default swaps.

Credit Suisse (CS) and UBS Group (UBS) also came under pressure after a report from Bloomberg said they are among banks under scrutiny in a Justice Department probe into whether financial professionals helped Russian oligarchs evade sanctions.

UBS' state-backed acquisition of troubled rival Credit Suisse for 3 billion Swiss francs, or $3.2 billion, helped ease concerns about recent banking industry turmoil earlier in the week.

Selling pressure waned over the course of the session, however, as traders felt the banking concerns may have been overdone amid optimism the Federal Reserve is nearing the end of its tightening cycle.

Interest rate-sensitive utilities stocks turned in a strong performance, resulting in a 1.8 percent jump by the S&P/TSX Capped Utilities Index.

Gold stocks also moved notably higher on the day despite a decrease by the price of the precious metal, driving the S&P/TSX Global Gold Index up by 1.5 percent.

On the economic front, a report from Statistics Canada said Canadian retail sales surged 1.4 percent to C$66.4 billion in January.

The increase was led by higher sales at motor vehicle and parts dealers and gasoline stations and fuel vendors.