Canada stocks to slip, then rebound in choppy 2014: Reuters poll

Thu Mar 20, 2014 11:00am EDT
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By John Tilak

TORONTO (Reuters) - Canadian stocks are expected to decline in the coming months after an early surge this year, then rebound by year-end to levels not touched since 2008 as prospects for global growth improve, a Reuters poll found.

The median forecast in a poll of 40 market analysts taken in the past week showed the benchmark Toronto Stock Exchange's S&P/TSX composite index .GSPTSE slipping from current levels to 14,150 at the mid-point of 2014. It is then expected to reach 14,500 by the end of the year, a gain of 6.4 percent from the end of 2013.

Having jumped 5 percent so far in 2014, the TSX is one of the strongest performers among major global benchmark indices.

It was trading near six-year highs this week, but investors could be in for a rocky ride with volatility fueled by factors ranging from slower emerging market growth to an escalation of geopolitical worries. In recent weeks, the market has reacted sharply to tensions flaring in Ukraine and signs of weakness in China's economy.

Still, a clearer and improved outlook for global growth is expected to energize natural resource companies, which benefit as demand for commodities rises, and the broader Canadian market by extension.

Overall, investors are seen taking their cues from rising stability in economic and earnings growth.

"We think it is absolutely going to be about fundamentals," said Paul Taylor, chief investment officer at BMO Asset Management. "We are looking for 2014 to be defined by a broadening of global growth beyond north America, with more regions sharing in the economic recovery."

Earlier this year, the World Bank raised its outlook for global growth for the first time in three years.   Continued...

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