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TORONTO (Reuters) - The Toronto Stock Exchange's main index finished slightly higher on Wednesday as optimism that the U.S. Federal Reserve would hold off on raising interest rates offset a drop in resource issues.
The heavyweight energy sector led the fall, battered by sagging oil prices after data showed U.S. crude inventories rose amid eroding demand.
Investors had their eyes trained south of the border as the Fed paused in its aggressive campaign of cutting interest rates and held rates steady.
The Fed also signaled greater concern about inflation and said the downside risks to growth looked to have diminished somewhat.
"Basically they set the table that at some point they are more concerned about inflation than the economy, and rate cuts are over," said Clement Gignac, chief economist and strategist at National Bank of Canada in Montreal, adding that rate hikes could be on the way.
The S&P/TSX composite index closed up 31.53 points, or 0.22 percent, at 14,441.13 with six of its 10 main sectors pushing higher. In a volatile session, the index swung both sides of the break-even mark, falling as low as 14,259.88.
"It's probable now that we won't see any more rate changes, certainly for the summer and we'll see what the fall brings," said John Kinsey, portfolio manager at Caldwell Securities Ltd, of the Fed's rate decision.
The energy sector lost 1.2 percent, while the resource-laden materials sector was 1.1 percent lower, with gold producers declining as the price of bullion weakened.
Among energy companies, Canadian Natural Resources was down C$2.28, or 2.3 percent, at C$97.82, while in the gold-mining sector, Barrick Gold was off 64 Canadian cents, or 1.5 percent, to C$40.81.
Fertilizer producer Potash Corp of Saskatchewan also weighed on the materials sector, falling C$6.74, or 2.9 percent, to C$223.25.
But the financial sector supported the benchmark, gaining 2 percent. All the major banks were higher, including Canadian Imperial Bank of Commerce, which rose C$1.89, or 3.2 percent, to C$61.11.
Research In Motion put on C$2.22, or 1.6 percent, to C$144.00 ahead of quarterly results.
After the market closed, RIM, maker of the BlackBerry, reported higher profit. But the results and outlook fell short of analyst expectations, and the stock dropped sharply in after-hours training in New York.
Market volume was 408 million shares worth C$8.8 billion. Decliners outpaced advancers 984 to 591. The blue chip S&P/TSX 60 index closed up 3.49 points, or 0.41 percent, at 861.96.
In New York, stocks also climbed amid the interest rate decision, the decline in oil prices. The Nasdaq Composite Index closed up 32.98 points, or 1.39 percent, at 2,401.26.
But a recommendation from Goldman Sachs that investors sell Boeing weighed on the Dow Jones industrial average, leaving it up just 4.40 points, or 0.04 percent, at 11,811.83.