CANADA STOCKS-Fed lifts TSX to six-week high as banks gain

Thu Jul 18, 2013 11:07am EDT
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* TSX rises 93.43 points, or 0.74 percent, to 12,662.20
    * All 10 main index sectors advance
    * RBC jump has biggest impact on index

    By John Tilak
    TORONTO, July 18 (Reuters) - Canada's main stock index
advanced on Thursday to its highest level in 1-1/2 months as
investors took heart from Federal Reserve Chairman Ben
Bernanke's comments that the U.S. central bank will adopt a
flexible approach in dialing back its stimulus program.
    Led by gains in financials and a jump in gold miners, the
Toronto market's Fed-inspired rally spilled over into a second
session as investors remained fixated on the Fed chairman's
congressional testimony. 
    Bernanke said on Wednesday that the Fed expects to start
scaling back its bond purchases later this year, but he left
open the option of changing that plan if the economic outlook
    "The Fed has reassured markets they're not going to take the
training wheels off the economy until it's more than ready,"
said Stan Wong, a portfolio manager at Macquarie Private Wealth.
"It's soothing the markets that the withdrawal of quantitative
easing is more data-dependent and not calendar-dependent."
    "The odds of a taper in September might have gone down a
little bit," he added. "It's not a set schedule. It's just going
to be based on where the economy goes from here."
    The Toronto Stock Exchange's S&P/TSX composite index
 was up 93.43 points, or 0.74 percent, at 12,662.20,
after reaching 12,663.47, its highest point since June 3.
    All of the 10 main sectors on the index were higher.
    Financials, the index's most heavily weighted sector, gained
1.2 percent. Royal Bank of Canada, the country's biggest
lender, jumped 1.5 percent to C$64.76 and had the biggest
positive influence on the index. Toronto-Dominion Bank 
was up 1.2 percent, at C$87.23.
     Energy shares climbed 0.8 percent, reflecting gains in the
price of oil. In the group, Canadian Natural Resources Ltd
 added 2 percent to C$34.04, and Suncor Energy Inc
 rose 0.7 percent to C$32.87.
    The materials sector, which includes mining stocks, was
helped by gains in gold mining stocks, which had a volatile
session. Barrick Gold Corp rose almost 1 percent to
C$16.50, and Goldcorp Inc was up 0.5 percent at C$27.77.
    "You'll see an oversold bounce in gold," Wong said. "You're
also getting into a positive season for gold."
    Wong predicted another 5 percent jump in the price of the
precious metal, but he does not recommend investing in the
sector long term.