TSX moves up as Federal Reserve meets

Wed Sep 12, 2012 5:17pm EDT
 
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TORONTO (Reuters) - Canada's main stock index closed slightly higher on Wednesday, with investors shifting their focus from a positive German court ruling on the euro zone's new bailout fund to caution over the U.S. Federal Reserve's meeting.

The Fed looks set to announce a third round of bond purchases after its meeting wraps up on Thursday, as it tries to drive borrowing costs even lower and breathe more life into an economy that is not growing quickly enough to reduce unemployment.

A pair of heavyweight gold miners were the biggest positive influences on the index, but bullion was flat after hitting six-month highs as some buyers scaled back their bets.

"It is surprising, given that you've now got the green light for quantitative easing in Europe to go along with another bout from the Fed, that you didn't see more strength in things like oil and gold," said Gavin Graham, president at Graham Investment Strategy.

The 19-commodity Thomson Reuters-Jefferies CRB index .CRB was off 0.1 percent.

Analysts say high hopes are priced in and any disappointing words from the Fed could result in pronounced sell-offs.

"The market's been climbing the proverbial wall of worry and it's seen cautiousness all the way along," said Paul Hand, managing director at RBC Capital Markets.

Top advancer Goldcorp (G.TO: Quote) jumped 2.3 percent to C$42.01 while Barrick Gold (ABX.TO: Quote) moved 0.9 percent higher to C$38.75.

Among the laggards, Potash Corp lost 1.9 percent to C$40.92 and Royal Bank of Canada dipped 0.7 percent to C$55.41.   Continued...

 
A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch