Fed commentary drives broad TSX gains

Wed May 21, 2014 4:55pm EDT
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index climbed on Wednesday after comments from the Federal Reserve assured investors of the central bank's commitment to gradually withdraw support to the U.S. economy and helped drive gains across all major sectors.

Fed policymakers last month began to lay groundwork for an eventual retreat from their extraordinarily easy monetary policy with a discussion of the tools they could employ to accomplish the task, but they did not take any final decisions, minutes from a recent policy meeting of the U.S. central bank showed.

The Toronto stock market's benchmark index climbed for a second straight session and is up about 7.5 percent this year.

Investors appeared to be less jittery about Fed commentary than they have been in the past, with both U.S. and Canadian stock markets climbing after the minutes were released.

"Now we feel like we can get off (the stimulus) without too much damage. That's very bullish," said Ken Lester, president and portfolio manager at Lester Asset Management.

Investors should brace for an eventual rise in interest rates but they shouldn't completely shun bonds, he said.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 124.67 points, or 0.86 percent, at 14,649.86.

Lester expects the Canadian benchmark to end the year higher from current levels.   Continued...

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