TSX hits 5-week high on surge in gold, U.S. data

Wed Mar 6, 2013 5:02pm EST
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By John Tilak

TORONTO (Reuters) - Canada's main stock index hit a five-week high Wednesday, with gold-mining shares leading the way on higher bullion prices, and sentiment getting a boost from U.S. economic data and central banker comments.

Private employers in the United States, Canada's biggest trade partner, hired more workers than expected in February, and demand for a range of factory goods was solid in January.

The U.S. Federal Reserve, in its Beige Book, said economic growth continued to improve gradually in January and early February as consumer spending picked up and the country's battered housing market maintained a broad-based recovery.

But analysts said the U.S. central bank did not seem to suggest it was close to withdrawing monetary stimulus.

"The market is being supported by expectations for continued stimulus from central banks," said Fergal Smith, a managing market strategist at Action Economics.

Gold stocks, which tend to react positively to commentary backing easy monetary policies, rallied the most and helped the materials group climb 3.4 percent.

"The materials sector has been beaten down. So it's more of a corrective bounce," Smith said. "You could also point to greater optimism because of the U.S. data or the Fed's Beige Book, which was consistent with no change of policy."

The materials group is down nearly 10 percent since the start of the year and is the worst-performing sector.   Continued...

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