December 17, 2013 / 2:08 PM / 5 years ago

TSX steady as market awaits Fed outcome

TORONTO (Reuters) - Canada’s main stock index closed little changed on Tuesday as investors awaited the outcome of a Federal Reserve meeting that could determine the future of the U.S. central bank’s bond buying program.

People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch

Weakness in commodity prices, which kept energy and gold-mining shares down, helped offset gains in the consumer discretionary and information technology sectors.

Fed officials began a two-day meeting to discuss the state of the world’s biggest economy and determine whether it is strong enough to warrant the rollback in monetary stimulus.

“Investors are taking a wait-and-see approach until we see the results of the Fed meeting tomorrow,” said Youssef Zohny, portfolio manager at Stenner Investment Partners, a unit of Richardson GMP.

Investors are concerned about a market pullback in the event of a stimulus rollback by the Fed, he added.

A trimming in the U.S. central bank’s asset purchases is expected to weigh on interest-rate sensitive sectors such as insurers, REITs and utilities.

The Toronto equities market has recovered in part from a sharp selloff last week when a stream of upbeat U.S. economic data suggested that the Fed might have more reasons to begin paring its bond purchases.

“It’s a coin toss. Nobody really knows what’s going to come out of the Fed meeting,” said Colin Cieszynski, senior market analyst at CMC Markets Canada. “It’s one of those things that could really go either way.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 4.25 points, or 0.03 percent, at 13,180.16 on Tuesday, although a decline in the S&P 500 was slightly more pronounced.

“It could be there is a bit more nervousness in the United States,” said Stenner’s Zohny, who has been forecasting that stabilization in commodity prices could help the TSX over the long run.

Six of the 10 main sectors on the index were higher.

The consumer discretionary group advanced 0.6 percent, with Magna International Inc (MG.TO) rising 1.1 percent to C$84.55.

The shares of information technology companies gained 1.7 percent, led by a 5.3 percent jump in Constellation Software Inc (CSU.TO).

With the price of bullion dropping 1.1 percent, shares of gold miners gave back 0.3 percent. Goldcorp Inc (G.TO) lost 0.4 percent to C$22.57.

In corporate news, Saputo Inc (SAP.TO) raised its bid for Australia’s Warrnambool Cheese and Butter Factory Holdings Co WCB.AX, aiming to knock out its rivals with a final sweetened offer. Saputo’s stock rose 1.3 percent to trade at C$47.77.

But shares of Athabasca Oil Corp (ATH.TO) slipped 2.6 percent, to C$6.40, after the oil producer said it planned to spend 42 percent less in 2014 to develop its assets.

Editing by W Simon and Andre Grenon

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