TSX climbs after Fed keeps interest rates steady
TORONTO (Reuters) - Canada’s main stock index advanced on Thursday after the U.S. Federal Reserve left interest rates unchanged as global economic uncertainty and a recent spike in market volatility kept the U.S. central bank from pulling the trigger.
Questions about China’s economic growth caused several market swings in the past few weeks, with equities, commodities and currencies making dramatic moves. After a wild ride of its own, the benchmark TSX index is down about 6 percent since the start of the year.
While the Fed did not rule out a potential rate increase later this year, its current decision was influenced by global macroeconomic risks and concerns about inflationary pressure.
“The Fed seems to have pulled off yet another balancing act,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
“The surge in volatility may have rightfully put the Fed’s plans on hold,” he said. “They did what the market was probably suspecting.”
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 23.38 points, or 0.17 percent, at 13,787.16. Seven of the 10 main sectors on the index were higher.
The energy sector jumped 1.3 percent, shrugging off declines in the price of Brent crude oil. Suncor Energy Inc (SU.TO: Quote) advanced 0.9 percent to C$35.13, and TransCanada Corp (TRP.TO: Quote) added 0.4 percent to C$44.09.
Financials, the index's most heavily weighted sector, gave back 0.8 percent. Royal Bank of Canada (RY.TO: Quote) lost 0.7 percent to C$73.97, and Manulife Financial Corp (MFC.TO: Quote) declined 2 percent to C$20.62.
(Reporting by Alastair Sharp and John Tilak; Editing by Meredith Mazzilli, Diane Craft and Leslie Adler)
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