U.S., Europe data lift TSX, but focus glued on Fed

Mon Dec 16, 2013 5:00pm EST
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index rose on Monday as investors cheered bullish economic data from Europe and the United States, but focus stayed fixed on what the U.S. Federal Reserve would decide to do about its bond-buying program at its policy meeting this week.

Data released on Monday showed that euro zone businesses ended the year on a high, helped by a jump in new orders, and U.S. manufacturing output rose for a fourth straight month in November.

A preliminary private survey meanwhile indicated a slowdown in growth in China's factory sector in December as reduced output offset a pickup in new orders.

But it was the future of Fed policy that grabbed market attention yet again, with investors speculating on when the U.S. central bank would begin to scale back its stimulus measures.

Fed officials will meet on Tuesday and Wednesday this week. Most recent U.S. economic data has appeared strong enough to spur the Fed to start reducing its massive stimulative bond-buying program.

"The last thing you want is for the Fed to throw a spanner in the works," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver. "But it is very unlikely to upset the apple cart."

"The expectation is for the Fed to hold the line as far as the rates are concerned," he added. "But we might get some significant news on the quantitative easing program in terms of a timetable to commence winding it down."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 58.71 points, or 0.45 percent, at 13,184.41.   Continued...

 
A man walks past a sign displaying TSX information is seen in Toronto, May 6, 2009. REUTERS/Mark Blinch