TSX slumps as Fed mulls stimulus exit
By John Tilak
TORONTO (Reuters) - Canada's main stock index slipped on Wednesday after comments by the U.S. Federal Reserve that it could begin rolling back its stimulus program this year weighed on investor sentiment and caused declines across most sectors.
Fed Chairman Ben Bernanke said the U.S. central bank expects to slow the pace of its bond purchases later this year and bring them to a halt around mid-2014.
Financial shares took the biggest toll on the market, while the gold-mining sector posted the sharpest decline, falling with the price of bullion.
The mood was further dented as smartphone maker BlackBerry (BB.TO: Quote) fell 3.6 percent after a brokerage downgraded its shares.
"That was not what I would call a ‘shock and awe' kind of announcement," Michael Sprung, president of Sprung Investment Management, said of the Fed's intention to reduce its bond purchases. "But perhaps people were looking for a bit longer run-time."
"The rates will likely go up," he added. "The markets are going to be concerned about how much of a break that will be on the economy."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 99.17 points, or 0.80 percent, at 12,268.29.
The Canadian market is in negative territory for the year. Continued...