U.S. data, stimulus comments push TSX higher

Tue May 28, 2013 5:06pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index rose on Tuesday, led by the energy and financial sectors, as investors were encouraged by positive U.S. economic data and signs of support for stimulus programs from the Japanese and European central banks.

The gains were capped by a decline in shares of gold producers after the price of bullion tumbled on the upbeat economic news. <GOL/>

Data on Tuesday showed U.S. home prices accelerated by the most in nearly seven years in March as the spring buying season helped, while surging consumer confidence pointed to some resilience for the economic recovery.

The resource-heavy Toronto market has gained about 7 percent since hitting a low last month.

"From a short-term perspective, it looks like a pretty strong rally which might be poised for a pullback," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 54.15 points, or 0.43 percent, at 12,750.52.

A board member of the European Central Bank said the ECB can still cut interest rates further to stimulate the economy if needed, while an official of the Bank of Japan said it was vital to keep long- and short-term interest rates stable.

"The market is betting that the stimulus won't be removed for some time yet," said Fergal Smith, managing market strategist at Action Economics.   Continued...

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