CANADA STOCKS-TSX jumps as Bank of Canada startles market with rate cut

Wed Jan 21, 2015 11:08am EST
 
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* TSX up 164.22 points, or 1.19 percent, at 14,572.66

* Seven of the 10 main index sectors advance

* Suncor, Canadian Natural drive gains

By John Tilak

TORONTO, Jan 21 (Reuters) - Canada's main stock index hit a two-week high on Wednesday after the Bank of Canada cut its benchmark rate in a surprise move to minimize the impact of lower oil prices on economic growth, sending most major sectors, including the energy group, higher.

The central bank's cut to 0.75 percent from 1 percent came after the longest period of unchanged rates since 1950. The move was directed partly at preventing financial instability that could result from a vulnerable housing market.

The Canadian market cheered the news, and energy shares rallied 4.4 percent. Financials, under pressure in part due to concerns about weakness in the oil and gas industry, also advanced.

Investors also awaited a potential move by the European Central Bank to initiate stimulus measures on Thursday, an action that would to serve as a major catalyst for global markets.

"If we see a larger-than-expected (stimulus) program, we're going to likely see a greater rally in gold and possibly in equity markets," said Mark Allen, vice president of Canadian equities at RBC Wealth Management.   Continued...