Canadian stock market rally seen cooling in 2015: Reuters poll

Thu Sep 25, 2014 4:34pm EDT
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By John Tilak

TORONTO (Reuters) - Canadian stocks are expected to build on gains that already took the broad market to a record high this year, but they may lose momentum in 2015 as weaker commodity prices and a sluggish domestic economy take hold, a Reuters poll found.

Toronto Stock Exchange's S&P/TSX composite index will reach 15,500 by the end of the year, up about 14 percent from the end of 2013 and a gain of just around 3 percent from Wednesday's close, the poll showed.

The median forecast in the poll of 41 market analysts and strategists taken over the past week showed the TSX then rising about 6 percent from where it is now to 16,000 by mid-2015.

The Canadian benchmark index has been one of the best performers among its global peers this year, rising about 11 percent and repeatedly hitting all-time highs.

While markets have benefited from loose monetary policies from global central banks, improving macroeconomic conditions and low volatility, uncertainty remains about when the U.S. Federal Reserve will raise interest rates.

"I would think that there's still room for the TSX to move higher," said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri.

"Overall all the pieces still remain in place to power stock markets - and that would be an economy that continues to improve in the U.S. and Canada and perhaps more modestly around the world, and corporate profits that are on pace to move to all-time highs."

Another factor working in the Canadian market's favor is the outlook for global growth, which is expected to pick up steam in 2015.   Continued...

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch