TSX steady as banks offset surge in golds; eyes on Fed

Wed Aug 14, 2013 5:12pm EDT
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index ended near flat on Wednesday as declines in the financial sector and concerns about a pullback in the U.S. Federal Reserve's bond buying offset a jump in shares of gold producers.

Investors were, however, encouraged by data that showed Germany and France grew more quickly than expected in the second quarter, fueled by renewed business and consumer spending in the region's two largest economies.

The market braced itself for a potential move, which many say will come in September, by the Fed to begin withdrawing support from its monetary stimulus program.

"When the shoe drops, that could cause the market to have a hiccup," said Lorne Steinberg, president of Lorne Steinberg Wealth Management. "Even the hint that bond yields are going to rise is negative for equities."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 2.89 points, or 0.02 percent, at 12,639.30.

The resource-heavy Canadian market, which eased from a two-week high touched in the previous session, has been hit by volatile commodity prices and is barely up since the start of the year.

"There is an increasing perception that slowing growth in the emerging markets is not just a hiccup but will continue for some time," Steinberg said. "That is making Canada less attractive to foreign investors."

Seven of the 10 main sectors on the index were in the red on Wednesday.   Continued...

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