April 9, 2014 / 11:55 AM / 5 years ago

TSX advances after Fed comments ease worries

TORONTO (Reuters) - Canada’s main stock index climbed on Wednesday after minutes from the Federal Reserve’s latest meeting appeared to ease investor fears of an aggressive roll-back of the U.S. central bank’s stimulus program.

A Bay Street sign, a symbol of Canada's economic markets and where main financial institutions are located, is seen in Toronto, May 1, 2013. REUTERS/Mark Blinch

The minutes suggested the Fed might not be in a rush to tighten monetary policy.

The commentary helped calm equity markets, which have been volatile due to worries about the Fed’s monetary policy direction and its timeline to raise interest rates. A selloff in U.S. biotechnology and technology shares that began last week had also weighed on sentiment.

The Toronto stock market’s benchmark index was up for a second straight session and had recovered most of its recent losses.

It’s no surprise that the market was bouncing back, said Marcus Xu, president and portfolio manager at MY Capital Management Corp in Vancouver.

“(The Fed is) not going to touch rates anytime soon, given the recovery is still pretty fragile,” he added. “We think the rally will resume and continue.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 63.13 points, or 0.44 percent, at 14,435.58. It has gained about 6 percent in 2014 and has outperformed the S&P 500 .SPX so far this year.

“The TSX is probably a better place to be this year,” said Xu, who is a little more bullish about the resource groups.

Nine of the 10 main sectors on the index were higher on Wednesday.

Financials, the index’s most heavily weighted sector, rose 0.3 percent. Royal Bank of Canada (RY.TO) advanced 0.2 percent to C$73.25, and Bank of Montreal (BMO.TO) added 0.4 percent to C$75.36.

The energy group climbed 0.6 percent, with Canadian Natural Resources Ltd (CNQ.TO) gaining 0.8 percent to C$44.05 and Enbridge Inc (ENB.TO) rising 0.1 percent to C$50.95.

In corporate news, Dollarama Inc (DOL.TO) reported a higher fourth-quarter profit and raised its quarterly dividend. Shares of the retailer jumped 8.4 percent to C$92.97.

($1=$1.09 Canadian)

Editing by Peter Galloway and Meredith Mazzilli

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