TSX gains as investors shrug off U.S. shutdown
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index ended higher on Tuesday as investors largely shrugged off a partial shutdown of the U.S. government, buying into banks, insurers and energy companies while many of the index's biggest mining stocks fell.
Some of the world's biggest gold miners slumped in line with a sharp fall in the price of bullion despite the deflationary risk of the U.S. government reducing its activities and a looming battle over raising Washington's borrowing limits.
Investors are getting wise to Washington politics and do not expect the shutdown to last too long, said Keith Richards, portfolio manager at ValueTrend Wealth Management in Barrie, Ontario.
And if the shutdown were prolonged, it might encourage the U.S. Federal Reserve to maintain its stimulus program for a longer period, which would also boost stocks, he said.
"If there is a longer shutdown it would slow the economy and therefore reduce the (Fed) taper talk that's been the prevalent fear out there," Richards said, adding that a looming fight over raising Washington's borrowing authority was much more dangerous.
The TSX index ended up 60.25 points, or 0.47 percent, at 12,847.44, its biggest one-day gain since September 18. It had opened in the red after hitting a two-week low on Monday.
The materials sector was the only one of ten major groupings to slip.
Goldcorp Inc (G.TO: Quote) and Barrick Gold Corp (ABX.TO: Quote) were the two heaviest drags on the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE, with Goldcorp off 2.7 percent at C$26.06 and Barrick falling 3 percent to C$18.60. Continued...