TORONTO (Reuters) - Canada’s main stock index rose on Monday after strength in the financial sector offset declines in shares of natural resource companies, while investors were fixated on the U.S. Federal Reserve’s plans for its stimulus program.
The market also paid attention to a jump in shares of Hudson’s Bay Co HBC.TO, which is not a member of the Toronto Stock Exchange’s flagship S&P/TSX composite index .GSPTSE, after the retailer said it planned to buy Saks Inc SKS.N.
Toronto stocks firmed after losses in the previous four sessions. Commodity prices were choppy, further weighing on the market.
Fed officials this week are likely to have a lively debate on how best to prepare financial markets for a reduction of their bond-buying program, but appear certain to wait for further economic data before curtailing the stimulus.
”Investors will read through the Fed’s statement with a fine-toothed comb,“ said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver. ”Even modest changes in phraseology could spark some market action, one way or the other.
“The risk here is not a massive rally but a minor selloff as people come to terms with what the Fed intends to do over the next few months.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 21.14 points, or 0.17 percent, at 12,669.04.
HBC shares climbed 5.8 percent to C$17.45 after the company said it would acquire Saks in a $2.4 billion deal that would add prime real estate to its portfolio and bring the luxury chain to Canada.
The move follows a slew of deals in the Canadian retail sector, including Loblaw Cos Ltd’s L.TO C$12.4 billion agreement to buy Shoppers Drug Mart Corp SC.TO.
“Many Canadian companies have looked after their money management very well, have preserved some cash and are in a mood of wanting to expand,” said Fred Ketchen, director of equity trading at ScotiaMcLeod.
“Sometimes you have to be aggressive to increase your competitive balance, and that’s what the Bay is trying to do,” he added.
Seven of the 10 main sectors on the index were higher on Monday.
Financials, the index’s most heavily weighted sector, gained 0.4 percent, with Toronto Dominion Bank TD.TO adding 0.6 percent to C$88.89.
Shares of energy producers gave back 0.5 percent.
Canadian Natural Resources Ltd CNQ.TO lost 0.7 percent to C$31.97, and Encana Corp ECA.TO fell 2.5 percent to C$18.05.
Shares of Turquoise Hill Resources Ltd TRQ.TO lost about a fifth of their value after Rio Tinto RIO.AX put on hold a more-than $5 billion underground expansion of the giant Oyu Tolgoi copper mine in Mongolia. Oyu Tolgoi is 66 percent owned by Rio Tinto’s Turquoise Hill.
The materials sector, which includes mining stocks, stumbled 0.1 percent. Gold miners were down 0.8 percent.
Barrick Gold Corp ABX.TO slipped 1 percent to C$18.09 and Goldcorp Inc G.TO fell 0.2 percent to C$29.41.
Editing by Dan Grebler