CANADA STOCKS-TSX steady as investors step back from Fed rally

Thu Sep 19, 2013 11:09am EDT
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* TSX up 6.34 points, or 0.05 percent, at 12,937.74
    * Index touches two-year high
    * 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 was
little changed on Thursday as gains in the energy sector offset
weakness in gold producers a day after the U.S. Federal Reserve
shocked markets by leaving its stimulative bond-buying program
in place.
    The market rallied strongly on the Fed's decision on
Wednesday, but on Thursday investors stepped back and tried to
dissect the U.S. central bank's comments on the economy and get
a sense of how long it can wait before scaling back its stimulus
    The Fed 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 2 percent despite a
4.3 percent jump in the price of bullion.
    The fall in golds limited any rises on the benchmark
Canadian index although it touched a two-year high in early
    "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."
    The Toronto Stock Exchange's S&P/TSX composite index
 was up 6.34 points, or 0.05 percent, at 12,937.74,
after rising as high as 12,964.86, its highest since August
    Six of the 10 main sectors on the index were up.
    Financials, the index's most heavily weighted sector,
dropped 0.5 percent. Royal Bank of Canada, the country's
biggest lender, declined 0.6 percent to C$65.86. Manulife
Financial Corp, an insurer, lost 2.3 percent to C$17.17
and had the biggest negative influence on the index.
    The materials sector, which includes mining stocks, fell 1
percent. Goldcorp Inc stumbled 1.7 percent to C$28.70,
and Barrick Gold Corp was down 2 percent at C$20.25,
brushing aside the jump in the gold price.
    "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 added 0.2 percent. In the group, 
Canadian Natural Resources Ltd climbed 0.3 percent to