TORONTO (Reuters) - Canada’s main stock index reached its highest level in six years on Wednesday and came within striking distance of its all-time high after the U.S. Federal Reserve shed some light on its plans to raise interest rates.
The U.S. central bank suggested interest rate increases could happen at a faster pace next year but noted benchmark borrowing costs would in the long-run be lower than earlier indicated.
The commentary lifted the price of bullion and sent gold-mining shares up 2.5 percent. That helped the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE close up 53.36 points, or 0.35 percent, at 15,109.25.
The benchmark, which has climbed in 13 of the last 14 sessions, is up almost 11 percent this year and has outperformed most major stock indexes. It is not far from its record high of 15,154.77, set in June 2008.
“We think that the market is rising on a fair degree of complacency and expectations that trees will grow to the sky,” said John Ing, president of Maison Placements Canada, who views share prices as expensive.
“There are a number of uncertainties that the market has overlooked. There will come a catalyst that can trigger a (decline),” he added.
The TSX’s heavily weighted energy sector, which was up 0.3 percent, has helped fuel the broader market’s rise as the deepening crisis in Iraq has driven oil prices higher.
Brent crude rose above $114 a barrel as Sunni militants continued their advance in northern Iraq.
In the index’s energy group, Talisman Energy TLM.TO rose 0.5 percent to C$11.53, while Canadian Natural Resources CNQ.TO gained 0.5 percent to C$47.59.
Among gold-mining shares, Goldcorp Inc G.TO jumped 3.9 percent to C$28.30, and Barrick Gold Corp ABX.TO added 1.8 percent to C$18.88.
BlackBerry Ltd BB.TO jumped 3 percent to C$9 after it agreed to a licensing deal with Amazon.com Inc AMZN.O that will let the smartphone maker offer some 240,000 Android applications from Amazon’s app store on its line-up of BlackBerry 10 devices this fall.
Valeant Pharmaceuticals Inc VRX.TO said it began an exchange offer for Botox maker Allergan Inc AGN.N, taking its hostile $50.8 billion bid directly to shareholders. Valeant shares slipped 0.4 percent to C$128.53.
Reporting by Cameron French and John Tilak; Editing by Peter Galloway and Meredith Mazzilli