TSX cuts loss as gold rebounds

Wed Apr 27, 2011 5:52pm EDT
 
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By Ka Yan Ng

TORONTO (Reuters) - Toronto's main stock index closed lower on Wednesday but cut most of its early-session losses, comforted by a bounce-back in gold-mining issues and signals from the Federal Reserve that it would maintain its support for the U.S. economy.

The index took its cue from Wall Street and oil prices, both of which nudged higher after the Fed said in a statement that it believed the economic recovery was proceeding at a moderate pace, with little risk that an inflationary psychology would take hold. Gold also rose to a record high of almost $1,530 an ounce and silver jumped 6 percent.

After a two-day meeting, the policy-setting Federal Open Market Committee said it intends to complete its $600 billion bond-buying program in June as scheduled.

Fed Chairman Ben Bernanke's first-ever press conference resulted in no serious wavering in optimism, while earnings reports in both Canada and the United States impressed investors.

"I think some of the news that we saw today implies the market is going to continue to grow moderately," said Pat McHugh, senior portfolio manager and equity strategist at Manulife Asset Management. "If anything, I think consensus opinion is that the pace of economic growth is going to slow as we proceed through 2011 and that nothing we see today really changes any of that."

The Toronto Stock Exchange's S&P/TSX composite index finished just 16.53 points lower, or 0.12 percent, at 13,892.57, rebounding strongly after falling nearly 1 percent to 13,770.81, its lowest point in a week. Seven of the TSX's 10 sectors ended lower.

The materials group ended up 0.61 percent, and its gold-mining subgroup finished 1.66 percent higher after seesawing through the session.

Barrick Gold Corp had been a top decliner after announcing on Monday a friendly C$7.3 billion deal to buy copper miner Equinox Minerals, but finished up 1.24 percent at C$48.34. It reported a 22 percent increase in quarterly profit on Wednesday, driven largely by the surge in bullion prices.   Continued...