November 14, 2013 / 1:22 PM / 5 years ago

Remarks by Fed's Yellen take TSX to two-week high

TORONTO (Reuters) - Canada’s benchmark stock index reached a two-week high on Thursday as remarks from Janet Yellen, nominee for the post of Federal Reserve chair, confirmed her support for the U.S. central bank’s easy monetary policy and boosted investor sentiment.

An electronic board displays the midday TSX index in Toronto February 16, 2011. REUTERS/Mark Blinch

The market also digested news that the euro zone economy stagnated in the third quarter of the year, weighed by weakness in both France and Germany.

Investors looking for signs of monetary policy direction from Yellen got a taste of it from her prepared remarks released on Wednesday and testimony before the Senate Banking Committee on Thursday.

Yellen indicated she would implement the Fed’s ultra-easy monetary policy until officials were confident the economic recovery was robust and job creation was sustainable.

“It’s maintaining the status quo, at present being not only an accommodative Fed, but also a Fed that’s going to engage in quantitative easing,” said Stephen Wood, chief market strategist for North America, at Russell Investments.

“There’s no radical policy shift, maybe a greater emphasis on the current policy,” he added.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 60.72 points, or 0.45 percent, at 13,431.38, after earlier touching 13,460.79 - its highest since October 31.

After a sluggish performance in the first half of the year, the index has rebounded strongly in the past month.

Longer term, the resource-driven Canadian market will benefit from the recoveries in the economies of the United States, Europe and China, Wood said, adding: “As global demand improves, the resources will participate.”

Eight of the 10 main sectors on the index were higher on Thursday.

Financial shares added 0.2 percent, with Bank of Nova Scotia (BNS.TO) climbing 0.9 percent to C$65.45.

The materials sector, which includes mining stocks, climbed as gold-mining stocks surged 2.3 percent, reflecting a jump in the price of bullion.

Goldcorp Inc (G.TO) was up 2.4 percent, at C$25.90.

In corporate news, CGI Group Inc (GIBa.TO) posted a better-than-expected adjusted profit for its fourth quarter, sending shares of the technology services company up 4.3 percent to C$39.24.

Turquoise Hill Resources Ltd (TRQ.TO) dropped 7.8 percent to C$4.27 after the miner said that it planned a rights offering, citing permitting issues that have delayed financing for the expansion of its Oyu Tolgoi copper-gold mine in Mongolia run by Rio Tinto (RIO.L).

Editing by G Crosse

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