Fed, gold miner gains keep TSX narrowly positive
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index eked out a gain on Wednesday, buoyed by signs the U.S. central bank will launch further monetary stimulus and as resurgent gold miners offset declines in banks and energy companies.
The Federal Reserve is likely to deliver another round of monetary stimulus "fairly soon" unless the U.S. economy improves considerably, minutes from the bank's meeting of July 31-August 1 released on Wednesday suggested.
The details of the Fed meeting overshadowed comments from Canada's own central bank governor on a wide array of topics, including the effect of Canadian dollar strength on exports.
"The main event was what the Fed said," said Levente Mady, market strategist at Union Securities in Vancouver. "That got everything going, whether it's gold, silver, bonds, stocks. Everything is going up based on further liquidity being thrown at the system."
Mady warned, however, that investors may ultimately be disappointed. "The Fed is running out of bullets. Just because they discussed QE3 doesn't necessarily mean they come out in September with blazing guns."
The Fed's policy-setting committee is next due to meet on September 12-13.
The five biggest positive influencers on Canada's benchmark index on Wednesday were all gold producers, which have been among the worst performers so far this year.
"Golds are about to do what the technicians call a long-term break out and reverse this downtrend they've been in for months," said John Ing, president of Maison Placements Canada. Continued...