CANADA STOCKS-TSX edges lower as market mulls over Fed stance
* TSX slides 4.62 points, or 0.04 percent, to 12,926.78 * Index had touched a two-year high in early dealings * Six of the 10 main index sectors advance * Gold-mining shares decline despite bullion jump By John Tilak TORONTO, Sept 19 (Reuters) - Canada's main stock index closed slightly lower on Thursday as a drop in resource shares offset strength in utilities, telecoms and other high-yielding groups, with investors catching their breath a day after the U.S. Federal Reserve surprised markets by leaving its stimulative bond-buying program intact. After a strong market rally in the previous session on the Fed's decision, investors stepped back and tried to dissect the U.S. central bank's comments on the economy and get a sense of how long the Fed can wait before scaling back its stimulus measures. The U.S. central bank said it would continue buying bonds at an $85 billion monthly pace, citing strains in the U.S. economy from a tight fiscal policy and higher mortgage rates. That spurred gold-mining shares on the Toronto market to their biggest single-day percentage jump in about four years on Wednesday, but on Thursday they gave back 3.2 percent despite a 4.4 percent jump in the price of bullion. The fall in golds helped the benchmark Canadian index ease from the two-year high it touched in early trading. "After such a strong reaction to the Fed yesterday, it's not surprising to see a little bit of a pullback," said Youssef Zohny, portfolio manager at Stenner Investment Partners, a unit of Richardson GMP. "The Fed has telegraphed it has less confidence in the economy," he added. "That bodes well for the defensive and income areas of the market, which seem to be repricing post-Fed." Zohny said volatility in commodity prices was weighing on the Canadian market, but he sees them stabilizing over the long run. The Toronto Stock Exchange's S&P/TSX composite index closed down 4.62 points, or 0.04 percent, at 12,926.78, after rising as high as 12,964.86, its highest level since August 2011. "It's normal for markets to have an initial, big flurry of action and then take a bit of time to digest the news and consider the ramifications," said Colin Cieszynski, senior market analyst at CMC Markets Canada. "For Canada, it's a case of we would've liked to have seen the U.S. economy growing stronger," he added. "The stronger the U.S. is, the better for us." Six of the 10 main sectors on the index were up. The telecoms group climbed 0.9 percent. In the group, Telus Corp jumped 2.1 percent to C$34.58, and Rogers Communications Inc advanced 1.2 percent to C$44.26. Utilities gained 1.4 percent, and REITs added 0.6 percent. Financials, the index's most heavily weighted sector, dropped 0.4 percent. Royal Bank of Canada, the country's biggest lender, declined 0.1 percent to C$66.20. Manulife Financial Corp, an insurer, lost 2.4 percent to C$17.16. The materials sector, which includes mining stocks, fell 1 percent. Goldcorp Inc stumbled 4 percent to C$28.02, and Barrick Gold Corp was down 3.5 percent at C$19.94, brushing aside the jump in the gold price. Goldcorp had the biggest negative influence on the index. "It suggests that people don't believe the (bullion) rally yet," Cieszynski said. "The Street probably needs more confirmation before they get too excited about the stocks." Shares of energy companies declined 0.3 percent, reflecting a drop in the price of oil. In the group, Canadian Natural Resources Ltd fell 0.8 percent to C$32.53.
© Thomson Reuters 2017 All rights reserved.