Economic data propels TSX to 2-1/2-year high

Thu Jan 16, 2014 4:53pm EST
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By John Tilak

TORONTO (Reuters) - Canada's main stock index advanced to its highest in 2-1/2 years on Thursday after upbeat data from the United States, Europe and Japan suggested strength in the global economic recovery, driving gains in almost every major sector.

Investors tracked a report showing that the number of Americans filing new claims for unemployment benefits dropped for a second week last week, while separate data showed U.S. consumer prices posted their biggest gain in six months in December.

European car sales in December gained the most in four years, an industrial group said. In Japan, core machinery orders shot up to a five-year high in November.

Partly offsetting the mood, Bombardier Inc (BBDb.TO: Quote) dropped 7.7 percent after the plane maker said it will delay putting its new narrow-body CSeries jet into commercial service by at least nine months, citing a longer-than-expected test phase.

After recording a 9.6 percent gain in 2013, the Toronto Stock Exchange's benchmark index is up about 1.5 percent this year.

Investors said the Toronto market, which has gained in seven of the last eight sessions, was starting to benefit from a rotation of funds from bonds to equities.

"There's been a swing in money flow over the last 12 months that is gaining momentum," said Julie Brough, vice president at Morgan Meighen & Associates.

"People frustrated by the fact that last year their bond funds either didn't make any money or lost money are trying to overcome their fear of equity markets," she added.   Continued...

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