TSX rebounds from 2017 low after Fed decision as commodities rally
By Fergal Smith
TORONTO (Reuters) - Canada's main stock index rebounded on Wednesday from a 2017 low hit in the previous session, led by gains for natural resource shares as commodity prices rallied, while investors took the latest Federal Reserve interest rate hike in stride.
The Fed raised rates for the second time in three months, while officials at the U.S. central bank stuck to their outlook for two more rate hikes this year and three in 2018.
"If they raise rates because the economy is moving ahead and inflation is relatively benign ... then I think the market will readily accept it," said Ian Nakamoto, equity specialist at MacDougall, MacDougall & MacTier, a division of Raymond James.
"The last thing we need is for them to be behind the curve, because we always get rates much higher than expected and then you come down with a thud, the economy and the stock market."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 141.30 points, or 0.92 percent, at 15,520.91. The index had its lowest close of the year on Tuesday.
The energy sector climbed nearly 3 percent as oil prices pulled out of a dive, with the most influential gainers including Encana Corp ECA.TO, which rose 5.7 percent to C$14.69.
U.S. crude oil futures CLc1 settled $1.14 higher at $46.86 a barrel on a surprise drawdown in U.S. crude inventories and data from the International Energy Agency suggesting OPEC cuts could create a crude deficit in the first half of 2017.
The materials group, which includes precious and base metals miners and fertilizer companies, jumped 4.4 percent as higher prices for copper and other industrial metals boosted base metal miners. Gold producers also gained as bullion prices rose. Continued...