TORONTO (Reuters) - Canada’s main stock index rose slightly on Wednesday with gold miners marking up strong gains as the U.S. Federal Reserve maintained its support for a stumbling U.S. economy.
The index has jumped sharply in recent weeks and is at a two-year high. In addition to miners, banking stocks have been a solid contributor to the rise, helped by the Bank of Canada’s move to drop its explicit rate-hike bias last week.
The Fed maintained its massive bond-buying campaign on Wednesday as it sounded slightly more pessimistic about growth.
With continued loose monetary policy in Canada and the United States likely, and signs of renewed growth in the Chinese economy, investors seem confident that the resource-rich Canadian index can add further gains.
“People are quite confident in the underlying strength in the U.S. economy,” said Elvis Picardo, strategist at Global Securities in Vancouver. “It does seem that there is an undercurrent of bullishness building up.”
“On the Canadian side we still have a bunch of earnings to look forward to. That should hopefully provide further confirmation that investors are on the right track here.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 14.72 points, or 0.11 percent, at 13,455.33. It is at levels last seen in July 2011.
Uranium miner Cameco Corp CCO.TO jumped 4.6 percent to C$19.87 after reporting a sharp jump in profit on higher prices and sales.
Barrick Gold Corp ABX.TO surged 4.1 percent to C$21.55 after a Bloomberg report that it has considered selling part of its copper business or taking a strategic equity investment to reduce its debt.
The company, the world’s top gold producer, reports results on Thursday.
Yamana Gold Inc YRI.TO jumped 4.6 percent to C$10.71 despite reporting a sharp drop in profit as the company stuck to its production outlook and said it was focused on cutting costs.
“If you are going to be somewhere in the developed markets, Canada looks to be a pretty good place to be if the Fed continues to be liberal with its money,” said Gavin Graham, chief strategy officer at Integris Pension Management Corp.
“It is the one that has lagged, and it has lagged because of gold and materials and energy because people have been worried about China,” Graham said of the Canadian index.
Canadian National Railway Co CNR.TO slipped 0.3 percent to C$114.76 as it continues to negotiate with the Teamsters union to avoid a labor disruption.
Editing by Peter Galloway