CANADA STOCKS-Shock Bank of Canada rate cut boosts TSX, banks climb

Wed Jan 21, 2015 5:31pm EST
 
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* TSX up 251.98 points, or 1.76 percent, at 14,560.42

* Eight of 10 main index sectors advance

* Enbridge, Suncor, Canadian Natural drive gains

By John Tilak

TORONTO, Jan 21 (Reuters) - Canada's main stock index rallied on Wednesday after the central bank cut its benchmark rate in a shock move, helping boost shares of energy companies as well as interest-sensitive banks and other financial issues.

The cut came after the longest period of unchanged rates since 1950. Governor Stephen Poloz said the central bank made the surprise move to provide "insurance" against risks stemming from the "oil price shock."

Investors gave a thumbs-up to the decision, sending the benchmark equity index up 1.8 percent and driving shares of most major sectors higher.

"The Bank of Canada's surprise cut to its overnight rate will help to buffer against the impact on employment, household incomes and mortgage serviceability in particular for Western Canada," said Mark Allen, vice president of Canadian equities at RBC Wealth Management.

"The ensuing drop in the Canadian dollar should also provide a stimulus for the economy nationwide."   Continued...