Dec 5 (Reuters) - Canada's main stock index rose slightly on Monday in choppy trading, with investors assessing a mixed set of quarterly earnings from top domestic lenders.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE), was up 13.49 points, or 0.05%, at 25,654.67, and was trading near a record high.
TD Bank (TD.TO), dropped 5.9% after warning of a challenging 2025 and suspending its medium-term earnings forecast as it works through its anti-money laundering remediation program.
Canada's second-biggest lender faced a rare asset cap by U.S. regulators after pleading guilty to violating anti-money laundering laws and agreeing to pay $3 billion in penalties.
Additionally, Bank of Montreal (BMO.TO), missed analysts' quarterly profit estimates.
In contrast, Canadian Imperial Bank of Commerce (CM.TO), gained 4.3% as its quarterly profit surpassed forecasts after setting aside smaller-than-expected loan loss provisions.
The top Canadian banks over the last year had allocated more money to cover souring loans as clients struggled to pay their mortgages and loans due to high interest rates.
"Overall, several of the Canadian banks have done fairly well considering the circumstances," said Shiraz Ahmed, senior portfolio manager and founder of Sartorial Wealth at Raymond James.
The financial sector overall (.SPTTFS), rose 0.05%.
Canada's energy sector (.SPTTEN), gained 0.6%, as oil prices climbed after OPEC+ delayed its planned output increase until April 2025 and extended production cuts through 2026.
Consumer staples (.GSPTTCS), led the gains, rising 0.7%.
Ahmed added, "There'll be a rate decision here coming up soon and it's likely going to be a cut. So given that, I think that there is a renewed exuberance in the equity market."
Traders have fully priced in a rate cut by the Bank of Canada next week but remain conflicted on the magnitude.
Among economic data, Canada recorded a bigger-than-expected trade deficit of C$924 million ($657.60 million) in October.
Across the border, the U.S. weekly jobless claims increased moderately last week.
Reporting by Nikhil Sharma and Ragini Mathur; Editing by Vijay Kishore
