TSX rises as big-bank earnings begin on positive note

(Updates with analyst comment, market open prices)

By Nikhil Sharma

Aug 26 (Reuters) - Canada's main stock index rose on Tuesday, boosted by financial shares, as investors greeted strong results from Bank of Montreal and Bank of Nova Scotia, kicking off earnings season for the top domestic lenders.

At 9:51 a.m. ET (1351 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 0.16% at 28,214.41 points.

The financials index, which has the biggest weighting on TSX, jumped 0.56%, after BMO and Scotiabank

beat

third-quarter earnings estimates on the back of easing trade tensions between Canada and the United States.

BMO and Scotiabank, which jumped 3% and 5%, respectively, in early trading, benefited from smaller-than-expected loan loss provisions.

"They've (bad loan provisions) been on a gradual trend, mostly up over the past couple of years. So if we're seeing a break in that trend, that would be a clear positive for banks going forward and for the Canadian market in general," said Josh Sheluk, portfolio manager at Verecan Capital Management.

Canada has stepped up its pursuit to reach a

potential deal

with Washington, most recently being the removal of several retaliatory import tariffs on U.S. goods.

Global investors turned cautious after U.S. President Donald Trump said on Monday he was firing Federal Reserve Governor Lisa Cook over alleged improprieties in obtaining mortgage loans.

Wall Street's main indexes slipped on the day. The move marks yet another attempt by the president to jeopardise the central bank's autonomy, potentially undermining investors' faith in U.S. assets.

The dollar stumbled against major currencies on Monday, helping gold to hit a more than two-week high. Toronto's materials index rose 0.3%.

Industrials led gains, up 0.6%.

Overall gains, however, were limited by the energy index that slipped 0.9% as it tracked a pullback in crude prices. (Reporting by Nikhil Sharma; Editing by Shreya Biswas)

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