TSX gains for second day as economic data supports

Wed Sep 4, 2013 5:15pm EDT
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index advanced for a second straight session on Wednesday, led by the industrial and financial sectors, with investors encouraged by global economic data and the prospect of only limited military strikes on Syria.

Gains were limited as lower gold and crude oil prices weighed on companies that produce those commodities.

The Toronto market's benchmark index, which touched a three-month high the previous session, is up about 5 percent for the quarter to date, firming after badly lagging major global indices in the first half of the year.

Surveys released on Wednesday showed Chinese service-sector growth reached a five-month high in August and euro zone businesses recorded their best month in August in more than two years. Separate data indicated U.S. auto sales in August rose at their fastest pace in nearly six years.

With economic data looking stronger, investors were bracing for the U.S. Federal Reserve to dial back its monetary stimulus program.

"The critical piece of the puzzle that the market is looking at is the strength of economic data and the extent to which it bolsters the Fed's case to begin their tapering," said Paul Taylor, chief investment officer at BMO Asset Management.

The data suggests that the Fed will begin pulling back on its asset purchases in September, he added.

Investors will now turn their focus to Friday's U.S. jobs report, considered by many market strategists as the single biggest indicator of the Fed's monetary direction.   Continued...

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