CANADA STOCKS-Fed, gold miner gains keep TSX narrowly positive

Wed Aug 22, 2012 4:40pm EDT
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* TSX closes up 2.07 points, or 0.02 percent, at 12,118.99
    * U.S. Fed points to further monetary stimulus "fairly soon"
    * Energy and banking heavyweights push down

    By Alastair Sharp
    TORONTO, Aug 22 (Reuters) - Canada's main stock index eked
out a gain on Wednesday, buoyed by signs the U.S. central bank
will launch further monetary stimulus and as resurgent gold
miners offset declines in banks and energy companies.
    The Federal Reserve is likely to deliver another round of
monetary stimulus "fairly soon" unless the U.S. economy improves
considerably, minutes from the bank's meeting of July 31-Aug. 1
released on Wednesday suggested. 
    The details of the Fed meeting overshadowed comments from
Canada's own central bank governor on a wide array of topics,
including the effect of Canadian dollar strength on exports.
    "The main event was what the Fed said," said Levente Mady,
market strategist at Union Securities in Vancouver. "That got
everything going, whether it's gold, silver, bonds, stocks.
Everything is going up based on further liquidity being thrown
at the system."
    Mady warned, however, that investors may ultimately be
disappointed. "The Fed is running out of bullets. Just because
they discussed QE3 doesn't necessarily mean they come out in
September with blazing guns."
    The Fed's policy-setting committee is next due to meet on
Sept. 12-13.
    The five biggest positive influencers on Canada's benchmark
index on Wednesday were all gold producers, which have been
among the worst performers so far this year.
    "Golds are about to do what the technicians call a long-term
break out and reverse this downtrend they've been in for
months," said John Ing, president of Maison Placements Canada.
    The price of bullion surged after the Fed minutes were
released, driven higher by hopes for further stimulus for which
gold could act as a hedge. 
    Goldcorp Inc rose 2.8 percent to C$39.96, Barrick
Gold Corp gained 2.2 percent to C$37.28, Yamana Gold
Inc jumped 4 percent to C$16.42 and Eldorado Gold Corp
 added 4.7 percent to C$13.01.
    The Toronto Stock Exchange's S&P/TSX composite index
 unofficially closed up 2.07 points, or 0.02 percent,
at 12,118.99.
    Heavyweight banking and energy stocks kept the index
hovering in the red for much of the day, with Royal Bank of
Canada ending down 1.1 percent at C$53.48 and Suncor
Energy 1.4 percent lower at C$31.73.
    Telecom company Telus Corp dipped 0.7 percent to
C$63.07 as it again sparred with a major investor over plans to
consolidate its two classes of stock. 
    Japan on Wednesday reported its exports slumped the most in
six months in July as shipments to Europe and China tumbled,
adding to concerns over global demand after a string of dire
trade figures from Asia's export engines. 
    Canadian retail sales dropped unexpectedly in June,
confirming a weaker trend in consumer spending that will likely
trim overall growth in the second quarter and raise questions
about the Bank of Canada's hawkish slant on monetary policy.
    In a sign of belt-tightening after rising commodity prices
excited the industry, top global miner BHP Billiton delayed its
planned $20 billion Olympic Dam copper expansion and said no
major projects would be approved before June 2013.
    "These mega-projects can bring mega-problems. There's a huge
capital risk," Ing said.