TSX down after Fed goes flexible; gold miners sink
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index slipped on Wednesday after the Federal Reserve stuck with a withdrawal of monetary stimulus and dropped a guideline for when U.S. interest rates may eventually rise.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 34.94 points, or 0.24 percent, at 14,334.04. Half of its 10 main sectors were in the red.
The reaction surprised Rick Hutcheon, president and chief operating officer at RKH Investments, who said the move gave the Fed more flexibility to react to numerous data points rather than be locked into perhaps misleading employment numbers.
"It's puzzling," Hutcheon said of the sharp fall in U.S. stocks that was then replicated to a lesser degree north of the border. "I would have thought it was market friendly."
Canadian equity losses were felt most sharply in several major gold-mining shares, which were already down on a stabilization in the Ukraine crisis, but somewhat neutralized by gains in Canadian Natural Resources CNQ.TO and other oil and gas stocks.
"I like the Canadian energy sector a lot ... Its fate is going to be determined by the recovery of the U.S. industrial might. The Americans need our energy," Hutcheon said, adding that western European countries were also looking to buy Canadian gas as Russia takes over Ukrainian military bases in Crimea.
Banks and telecoms companies, both well-known dividend plays, also featured in the list of top performers, with Rogers Communications Inc RCIb.TO up 1.3 percent at C$44.10 and Bank of Montreal BMO.TO gaining 0.4 percent to C$72.63.
Barrick Gold Corp ABX.TO fell 3.4 percent to C$21.78 and Goldcorp Inc G.TO was off 2.7 percent at C$30, with the gold miners falling with bullion prices on a mixture of Fed reaction and an easing of anxiety over the Ukraine crisis. Worries about Ukraine had recently added to gold's safe-haven appeal. Continued...