Banks, miners lift TSX; attention shifts to Fed minutes' release

Tue Aug 20, 2013 5:05pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index jumped on Tuesday as strength in materials and financials drove investor sentiment, offsetting worries about the U.S. Federal Reserve's stimulus program.

After recording its biggest drop in eight weeks the previous session, the market recovered to post its sharpest gain in more than 1-1/2 weeks.

A drop in the U.S. dollar lifted bullion prices and pushed gold-mining shares up 3.8 percent. <GOL/>

The Toronto stock market's benchmark index, which has outperformed the S&P 500 .SPX in August to date, had a stronger gain than its U.S. counterpart on Tuesday. .N

Investors trained their focus on the release on Wednesday of minutes from the Fed's last policy meeting, which they will scan for clues on when the U.S. central bank is likely to begin trimming its stimulative bond purchases.

"Nobody wants the party to end," said Marcus Xu, portfolio manager at MY Capital Management Corp in Vancouver.

"Investors want to find out what the scale of the taper is going to be, if there's going to be any surprises," he added. "The Fed is probably going to be a little dovish, given the economic growth is not significantly stronger than before yet."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 82.09 points, or 0.65 percent, at 12,670.11.   Continued...

People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch