TORONTO (Reuters) - Canada’s main stock index slipped on Wednesday after comments from the U.S. Federal Reserve suggesting a rollback of its monetary stimulus program in the next few months fueled a bullion selloff, which weighed on gold-mining stocks.
Bullion prices hit a four-month low, sending gold miners down about 4 percent to their lowest level in more than a month, which offset gains in the index’s energy sector. <GOL/>
Fed Chairman Ben Bernanke assured markets in a speech on Tuesday that the Fed will maintain its ultra-easy monetary policy for as long as required. But in minutes from the Fed’s October meeting released on Wednesday, Fed officials indicated they could decide to start scaling back the program at one of the central bank’s next few meetings, provided economic growth supports the move.
Investors also combed through data that showed U.S. consumer spending topping market expectations in October but inflation remaining subdued.
“The Fed is very cautious about derailing any economic recovery that we’re having,” said Luciano Orengo, a portfolio manager at Manulife Asset Management, who added that recent economic data has been painting a mixed picture.
“Given that third-quarter earnings are pretty much out of the way, investors are looking closely at macroeconomic data coming out.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 12.76 points, or 0.09 percent, at 13,430.01.
After a sluggish start to the year, the benchmark Canadian index has rebounded, though its gains don’t match those of U.S. indexes.
A near-term correction could be on the horizon, Orengo said, but U.S. stocks are likely more vulnerable than the Canadian market.
Five of the 10 main sectors on the index were in the red on Wednesday.
The materials sector, which includes mining stocks, dropped 2.2 percent, hurt by the fall in gold producers. Goldcorp Inc (G.TO) was down 3.2 percent at C$24.51, and Barrick Gold Corp (ABX.TO) shed 3.9 percent to C$17.94.
Shares of financial companies climbed slightly, with Toronto-Dominion Bank (TD.TO) adding 0.3 percent to C$97.86.
Energy shares advanced 0.7 percent, benefiting from a gain in the price of Brent crude oil. Suncor Energy Inc (SU.TO) rose 1.4 percent to C$37.85.
Editing by Nick Zieminski; and Peter Galloway