TORONTO (Reuters) - Toronto’s main stock index climbed on Tuesday after the U.S. Federal Reserve said it has seen recent signs of strength in the economy, while upbeat U.S. retail sales data soothed fears about the health of the global recovery.
The Toronto index followed U.S. stocks, which also got a lift from the better than expected February U.S. retail sales report. .N<MKTS/GLOB>
“The consumer is contributing to the majority of GDP growth so retail business is very important,” said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver.
Heavyweight gainers in Toronto included Suncor Energy (SU.TO), up 2.6 percent at C$34.04, and Royal Bank of Canada (RY.TO), which was 2.2 percent higher at C$58.00. Teck Resources TCKb.TO rose nearly 3 percent at C$36.53 and fellow miner First Quantum (FM.TO) was up 3.3 percent at C$21.13.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished the session up 109.68 points, or 0.88 percent, at 12,537.69, with nine of its 10 key sectors higher. The materials group sank 0.4 percent as gold prices came under pressure as bullion’s safe-haven appeal faded as hopes for the economy rose. <GOL/>
The U.S. central bank offered few clues on the chances of it undertaking further stimulus measures and described the economy as “expanding moderately,” the same words it used in its January statement. But it also said the economy still faced significant downside risks.
The Fed didn’t signal any deviance from its plan to keep interest rates low and that fueled optimism about economic growth, pushing up oil and copper prices, and correspondingly energy and base-metal mining shares in Toronto. <O/R>
Investor sentiment about the economic outlook in Europe was also bolstered after euro-zone finance ministers gave final approval to a second bailout for Greece and data in Germany showed analyst and investor sentiment was significantly more robust than expected in March.
Sid Mokhtari, market technician and director, institutional equity research at CIBC World Markets, said key technical levels of the index’s 50- and 200-day moving averages showed a positive uptrend may be in play.
“A golden cross pattern is a longer-term buy signal. But for validation of the 50-day and 200-day you often need about a week or two of the 50 staying above the 200,” he said.
In company news, Viterra VT.TO, Canada’s largest grain handler, remained one of the most heavily traded stocks on the index on continued speculation that it will be taken over. Viterra ended the day up 1.9 percent at C$14.73.
Valeant Pharmaceuticals International Inc (VRX.TO) (VRX.N) dropped 0.3 percent to C$54.09 after it said it will buy some assets of Austrian pharmaceutical company Gerot Lannach to boost its presence in Central and Eastern Europe.
Editing by Peter Galloway