TSX jumps 1.3 percent as Fed holds steady, gold miners surge

Wed Sep 21, 2016 4:47pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index notched its highest close in almost two weeks on Wednesday as gold miners surged after the U.S. Federal Reserve held interest rates steady, which also boosted shares of dividend-paying utility companies.

Adding to the upward momentum, energy companies gained as oil prices rose sharply after a third surprise weekly drop in U.S. crude stockpiles. [O/R]

The Toronto Stock Exchange's S&P/TSX composite index ended up 188.84 points, or 1.30 percent, at 14,710.82, its highest finish since Sept. 8. All of the index's 10 main groups gained.

The Fed strongly signaled it could still tighten monetary policy by the end of this year, while three dissenters said they favored raising rates this week.

"The market will see this as a continuation of the standard operating procedure thus far, namely that rates are lower for longer, that this is a very cautious Fed," said John Stephenson, president at Stephenson & Company Capital Management.

"I think the reality is this is a Fed that is more market-dependant than it is data-dependant," he added.

The materials group, which includes precious and base metals miners and fertilizer companies, jumped 4.6 percent, as the Fed news helped extend gold's gains after the Bank of Japan earlier adopted a target for long-term interest rates.

Barrick Gold Corp surged 7.9 percent higher to C$24.51 and Goldcorp Inc advanced 6.2 percent to C$22.06.   Continued...

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch