October 9, 2013 / 12:20 AM / in 4 years

TSX inches higher on Yellen news, U.S. budget hopes

TORONTO (Reuters) - Canada’s main stock index rose modestly, boosted by gains in most sectors, as investors were encouraged by the nomination of a new Federal Reserve chief and on signs of hope for a resolution to the government shutdown south of the border.

A general view of the TSX (Toronto Stock Exchange) Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch

With the U.S. government on its ninth day of a shutdown, President Barack Obama began inviting lawmakers to the White House for meetings to discuss the impasse and raising the debt limit.

While there were no concrete signs of progress, some members of both parties floated the possibility of a short-term increase in the debt limit to allow time for broader negotiations on the budget.

Sentiment was also improved as Obama nominated Federal Reserve Vice Chair Janet Yellen to the Fed’s top spot, providing markets with clarity on at least one issue of focus. Yellen is expected to tread carefully in winding down economic stimulus that has bolstered stocks.

Still, given the uncertainty markets still face, including the looming deadline to raise the U.S. debt ceiling, the upward direction may not last, said Adrian Mastracci, portfolio manager at KCM Wealth Management in Vancouver

“The markets are looking for some direction, and they found a little bit but not too much,” said Mastracci. “I think the volatility will still continue.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 37.92 points, or 0.3 percent, at 12,730.33.

Investors also parsed minutes from last month’s Fed meeting that showed its unexpected decision not to withdraw its economic stimulus was a “relatively close call”.

BCE Inc BCE.TO was the top positive influence, gaining 2.2 percent to C$44.70. Suncor Energy (SU.TO) also boosted the market, rising 1 percent to C$36.17.

Jean Coutu Group (PJCa.TO) dropped 4.2 percent to C$18.12 after the pharmacy chain reported quarterly profit that missed expectations.

With additional reporting by Alastair Sharp; Editing by Kenneth Barry

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