CANADA STOCKS-Banks lead broad TSX gains ahead of Fed decision

Tue Oct 29, 2013 4:58pm EDT
 
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* TSX ends up 68.77 points, or 0.51 percent, at 13,440.61
    * Several banks have hit record highs recently

    By Alastair Sharp
    TORONTO, Oct 29 (Reuters) - Canada's main stock index ended
higher on Tuesday, with gains in financial stocks and some
resource issues offsetting a slip in gold miners, as economic
data backed the view the U.S. Federal Reserve will leave its
monetary stimulus intact.
    The Toronto Stock Exchange's S&P/TSX composite index
 has gained almost 6 percent in the past three weeks
and is at its highest level in more than two years.
    That burst followed the resolution of the U.S. debt and
budget crisis and a growing confidence among investors that the
Fed will not trim its stimulus anytime soon.
    "If we see some tapering announcements coming off then there
would be some real negative tone to the equity market, but I
don't think we're going to get that," said Paul Gardner, a
portfolio manager at Avenue Investment Management. "The numbers
are just too uneven."
    U.S. consumer spending rose in September, but auto sales
fell, indicating sluggish economic growth in the third quarter.
    Other data on Tuesday showed consumer confidence fell
sharply in October as a result of the partial government
shutdown while producer prices unexpectedly fell in September,
pointing to muted inflation. 
    Given that the resource-rich Canadian index has lagged U.S.
stock indexes in recent years, investors seemed confident that
it can keep rising as the corporate earnings season hits high
gear. It ended up 68.77 points, or 0.51 percent, at 13,440.61.
    "Generally speaking, the tone remains in a more upbeat phase
going into the earnings period," said Sid Mokhtari, market
technician and director of institutional equity research at CIBC
World Markets. "The assumptions should still be viewed
constructively."
    Canadian Natural Resources Ltd gained 2.8 percent
to C$33.61 and Suncor Energy Inc added 1.4 percent to
C$38, while Goldcorp Inc slipped 2.9 percent to C$27.48
and Barrick Gold Corp lost 2.1 percent to C$20.71.
    Expectations of continued Fed stimulus, combined with signs
of renewed strength in Canada's housing sector, have pushed
several bank stocks to record highs in recent weeks.
    Toronto-Dominion Bank gained 1 percent to C$95.15,
Bank of Nova Scotia was up 1.1 percent at C$63.54, and
Royal Bank of Canada, the country's largest lender,
added 0.7 percent to C$70.06.
    Talisman Energy Inc gained 2.6 percent to C$13.25
after activist investor Carl Icahn said he had increased his
stake in the oil producer. 
    Thomson Reuters Corp was up 3.4 percent to C$38.58
after reporting net sales in its financial business turned
positive and that it planned to cut 3,000 jobs.