Banks lead broad TSX gains ahead of Fed decision
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index ended higher on Tuesday, with gains in financial stocks and some resource issues offsetting a slip in gold miners, as economic data backed the view the U.S. Federal Reserve will leave its monetary stimulus intact.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE has gained almost 6 percent in the past three weeks and is at its highest level in more than two years.
That burst followed the resolution of the U.S. debt and budget crisis and a growing confidence among investors that the Fed will not trim its stimulus anytime soon.
"If we see some tapering announcements coming off then there would be some real negative tone to the equity market, but I don't think we're going to get that," said Paul Gardner, a portfolio manager at Avenue Investment Management. "The numbers are just too uneven."
U.S. consumer spending rose in September, but auto sales fell, indicating sluggish economic growth in the third quarter.
Other data on Tuesday showed consumer confidence fell sharply in October as a result of the partial government shutdown while producer prices unexpectedly fell in September, pointing to muted inflation.
Given that the resource-rich Canadian index has lagged U.S. stock indexes in recent years, investors seemed confident that it can keep rising as the corporate earnings season hits high gear. It ended up 68.77 points, or 0.51 percent, at 13,440.61.
"Generally speaking, the tone remains in a more upbeat phase going into the earnings period," said Sid Mokhtari, market technician and director of institutional equity research at CIBC World Markets. "The assumptions should still be viewed constructively." Continued...