CANADA STOCKS-Fed-fueled rally takes TSX to two-week high

Thu Dec 19, 2013 4:38pm EST
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* TSX rises 57.47 points, or 0.43 percent, to 13,392.20
    * Six of 10 main index sectors advance
    * Weekly gain strongest in five months
    * Enbridge in focus ahead of decision on pipeline

    By John Tilak
    TORONTO, Dec 19 (Reuters) - Canada's main stock index
reached its highest level in two weeks on Thursday after a
decision by the U.S. Federal Reserve to trim its monetary
stimulus program helped drive gains in the financial and energy
    The Toronto market basked in the afterglow of the Fed
announcement, which came in on Wednesday, recording a weekly
gain of 2 percent, it strongest performance in more than five
    However, a sharp drop in bullion dragged the commodity price
to a six-month low and triggered a decline in gold-mining
    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.
    "The uncertainty that was hounding the market for the last
several months was removed," said Shailesh Kshatriya, associate
director for client investment strategies at Russell Investments
    "The Fed was very careful in the way it massaged the
language, that tapering will be gradual and tightening is still
a long time away," he added.
    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
David Cockfield, managing director and portfolio manager at
Northland Wealth Management. "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
 closed up 57.47 points, or 0.43 percent, at 13,392.20,
after reaching 13,396.62, its highest level since Dec. 3.
    Six of the 10 main sectors on the index were higher.
    Financials, the index's most heavily weighted sector,
climbed 0.8 percent. Royal Bank of Canada, the country's
biggest lender, rose 1.1 percent to C$70.58, having the biggest
positive influence on the market. Manulife Financial Corp
 gained 2.6 percent to C$20.75.
    Higher oil prices helped support shares of energy producers.
Canadian Natural Resources Ltd advanced 1.7 percent to
    Gold-mining shares dropped nearly 2 percent, reflecting a
3.8 percent decline in bullion prices.
    Goldcorp Inc shed 1.6 percent to C$22.24, and Barrick
Gold Corp gave back 2.2 percent to C$17.68.
    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. The stock
was up 1.1 percent C$45.33.