CANADA STOCKS-TSX hits two-week high as Fed after-effect fuels gains

Thu Dec 19, 2013 10:59am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* TSX rises 15.66 points, or 0.12 percent, to 13,350.39
    * Five of 10 main index sectors advance
    * Enbridge in focus ahead of decision on pipeline

    By John Tilak
    TORONTO, Dec 19 (Reuters) - Canada's main stock index
climbed on Thursday to its highest in two weeks after a decision
by the U.S. Federal Reserve to trim its monetary stimulus
program helped push up the financial and energy sectors. 
    However, a selloff in bullion dragged the commodity price to
a six-month low and triggered a decline in gold-mining shares.
    Investors bracing for a selloff after the Fed statement on
Wednesday were pleasantly surprised by the market reaction.
Global equity markets rallied after the news, and Toronto stocks
recorded a 1.2 percent jump in Wednesday's session.
    "A lot of people were sitting with their finger on the
trigger, ready to buy into a market decline, but there were no
sellers," said David Cockfield, a portfolio manager at Northland
Wealth Management, who said the market's response suggested that
tapering was already factored into prices.
    Investors were encouraged by the fact that increasing
strength in the world's biggest economy and greater confidence
in the recovery led to the Fed decision.
    The U.S. central bank cut the pace of its monthly asset
purchases and suggested its key interest rate would stay low
longer than previously promised. 
    "The black clouds on the horizon, which were the political
debt ceiling and when tapering arrives, have all gone by," said
Cockfield. "It's hard to find some reason to be overly
pessimistic here."
    "The risk element has gone out of the market," he added.
"It's a more settled and benign environment for equities."
    The Toronto Stock Exchange's S&P/TSX composite index
 was up 15.66 points, or 0.12 percent, at 13,350.39,
after reaching 13,369.75, its highest since Dec. 3.
    Five of the 10 main sectors on the index were higher.
    Financials, the index's most heavily weighted sector,
climbed 0.3 percent. Royal Bank of Canada, the country's
biggest lender, rose 0.5 percent to C$70.20, having the biggest
positive influence on market. Manulife Financial Corp 
gained 0.7 percent to C$20.38.
    Higher oil prices helped support shares of energy producers.
Suncor Energy Inc climbed 0.6 percent to C$36.60. 
    Gold-mining shares dropped about 2 percent, reflecting a 3.2
percent decline in bullion prices. 
    Goldcorp Inc shed 2 percent to C$22.14, and Barrick
Gold Corp gave back 0.9 percent to C$17.92.
    Investors also focused on Enbridge Inc, as Canada's
largest pipeline company is expected to find out on Thursday
whether regulators will recommend approval of its proposed C$6
billion ($5.7 billion) Northern Gateway oil pipeline.