TSX hits six-week low on Fed fears, National Bank
By John Tilak
TORONTO (Reuters) - Canada's main stock index touched its lowest point in six weeks on Wednesday after signs of a strengthening U.S. economy heightened fears that the U.S. Federal Reserve might soon begin scaling back its monetary stimulus program.
Further weighing on sentiment was a 1.5 percent drop in shares of National Bank of Canada NA.TO after the lender reported a 4 percent fall in fourth-quarter profit.
Also getting attention, the Bank of Canada held its key interest rate steady but noted that the risks of undesirably weak inflation now appear greater than they did six weeks ago.
Much of the market's focus, however, remained on U.S. economic data, which has been increasingly upbeat. Reports on Wednesday showed U.S. private employers topped expectations in adding jobs in November and that sales of new U.S. single-family homes recorded their biggest increase in nearly 33-1/2 years in October.
"Those concerns are going to wax and wane," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver. "By no means is this a runaway expansion, which will force the (Fed's) hand in terms of tapering stimulus at a very sharp pace."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 14.95 points, or 0.11 percent, at 13,304.92, after touching 13,234.47, its lowest since October 23.
Eight of the 10 main sectors on the index were in the red.
Financials, the index's most heavily weighted sector, lost 0.7 percent. Royal Bank of Canada (RY.TO: Quote), the country's biggest lender, gave back 0.8 percent to C$69, and Toronto-Dominion Bank (TD.TO: Quote) declined 0.4 percent to C$95.75. Continued...