TSX gains as Ukraine fears ease, gold-mining shares jump

Wed Mar 12, 2014 5:15pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index advanced on Wednesday as a jump in gold-mining shares and a gain in industrials helped drive the market after concerns about instability in Ukraine appeared to ease with heightened diplomacy.

Investors followed developments in Ukraine, with the European Union agreeing to a framework for its first sanctions on Russia since the Cold War and the United States intensifying efforts to negotiate with Russia.

However, recent sluggish data from China and news of the country's first bond default raised investor nervousness about the world's second-biggest economy. The London copper benchmark dropped in early trade to its lowest in about four years but rose later in the session.

Those worries resulted in a rush to perceived safe-haven assets such as bullion, which jumped 1.5 percent and sent shares of gold producers up more than 3 percent.

"We're seeing a mixed picture. At the moment, markets are consolidating," said Youssef Zohny, a portfolio manager at Stenner Investment Partners, a subsidiary of Richardson GMP.

"Risk aversion is slowly creeping into the market because of concerns with the Chinese credit situation, as well as geopolitics," he added. "Whenever markets are pretty strong, there's always a risk of a healthy correction."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 51.77 points, or 0.36 percent, at 14,319.

With Wednesday's gains, the Toronto market is up about 5.1 percent this year.   Continued...

People walk past an electronic board displaying the midday TSX index in Toronto February 16, 2011. REUTERS/Mark Blinch