TORONTO (Reuters) — The Toronto Stock Exchange’s main index struck a record high yesterday as a positive outlook on bank earnings and steadying metal prices lifted financial institutions and miners.The S&P/TSX composite index closed up 87.92 points, or 0.7 percent, at 12,644.90, more than 42 points higher than the the previous record close, set Tuesday. All but one of the index’s ten main groups were higher as the resource-laden TSX logged its fourth gain in five sessions.

Just before the bell, the index reached a intraday record peak of 12,653.96 points, surpassing Tuesday’s 12,623.43-point plateau.

The heavyweight financial sector climbed one percent. Analysts expect banks, which represented three of the TSX’s 10 biggest weighted gainers, to show solid earnings growth when they begin reporting on Tuesday.

“Over half of (banks’) earnings now are from asset management and from investment banking, which has been very strong obviously,” said Gavin Graham, chief investment officer at Guardian Group of Funds.

“And if you assume that interest rates are going to come down a little in the next few months, then obviously they’ll be beneficiaries of that.”

Royal Bank of Canada was up 58 Canadian cents, or 1.1 percent, at C$54.60, and Toronto-Dominion Bank was up 55 Canadian cents, or 0.8 percent, at C$67.96. Bank of Nova Scotia rose 53 Canadian cents, or 1 percent, to C$52.80.

Raw materials producers were up 0.7 percent and have added 4.7 percent in the last four sessions. Global metals remained hot, led by record-breaking nickel prices.

Uranium giant Cameco Corp. advanced C$2.25, or 5.7 percent, to C$41.82. Fertilizer producer Potash Corp. added C$5.81, or 3.6 percent, to C$165.49.

Elsewhere, telecoms rose 0.8 percent as the federal regulator agreed to give telephone companies more flexibility in setting prices for local service.

Telus Corp. was up C$1.03, or 1.8 percent, at C$57.03.

Energy producers, which are flat on the year, climbed 0.2 percent yesterday. US crude futures slipped eight cents in light electronic trade.

“With oil not having broken to the down side at that $55 level, people may be thinking that OPEC isn’t going to cheat as much as it usually does and it won’t be quite as warm as it was last year,” Graham said.

“Then perhaps it’s not a bad idea to have some exposure here (in the energy sector)” he said.

Near market close, the Finance Department forecast a hefty C$7.2 billion ($6.3 billion) budget surplus for the 2006-07 fiscal year, saying this would give it enough money for tax cuts and debt reduction.

Market volume was a very light 203 million shares worth C$2.1 billion. Advancers outpaced decliners 778 to 702.