TORONTO (Bloomberg) — Canadian stocks rose to the highest this year as financial companies including Toronto-Dominion Bank advanced on speculation they will offer better returns than the commodity producers that paced gains in the market in 2006.

“The flight to safety continues — financial stocks fit into that picture,” said Rob Callander, who helps manage about $800 million at Caldwell Securities Ltd. in Toronto. “Energy and metal commodities had a phenomenal run. Now we’ve had a significant drop in oil. There’s still lots of money looking for a home —moving into financial stocks.”The Standard & Poor’s/TSX Composite Index added 99.86, or 0.8 percent, to 13,010.73 in Toronto. The benchmark, up 0.8 percent this year, closed at the highest since its December 14 record of 13,021.77.

The index extended gains in the afternoon after oil and bullion prices erased losses, lifting energy and materials producers such as Talisman Energy Inc. and Goldcorp Inc.

Toronto-Dominion, the country’s second-largest lender by assets, gained 80 cents to C$69.60. TD Banknorth Inc., its U.S. consumer banking unit, said fourth-quarter net income climbed 50 percent to $83.4 million, on increased deposits from its purchase of Hudson United Bancorp.

Bank of Nova Scotia added 59 cents to C$51.22. Canada’s third-biggest bank said in a statement that it sold C$345 million of preferred shares to a group of brokerages.

Manulife Financial Corp., Canada’s biggest insurer, rose eight cents to C$39.86. Earlier it touched C$40.11, an all-time high.

A measure of financial shares that accounts for almost a third of the index’s value advanced 0.7 percent and contributed the most to the S&P/TSX’s rise.