September 17, 2014 / 11:44 AM / 4 years ago

TSX slips after U.S. Fed comments on rate hike plans

TORONTO (Reuters) - Canada’s main stock index edged lower on Wednesday as investors digested commentary from the U.S. Federal Reserve on its outlook for interest rates following a two-day policy meeting.

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch

The Federal Reserve renewed its pledge to keep interest rates near zero for a “considerable time,” but also indicated it could raise borrowing costs faster than expected when it starts moving.

The volatility of global markets has increased in recent weeks as the Fed statement approached, with the Canadian benchmark stock index trading sideways after a strong run-up since the start of the year.

“There’s a sigh of relief that the Fed is staying the course as far as its monetary policy goes,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

“It’s a key event that’s out of the way,” Picardo said. “Markets are now focusing on other potential catalysts that could take us higher.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 51.66 points, or 0.33 percent, at 15,458.88. It is up more than 13 percent this year.

“If the U.S. markets continue to march higher and if the global economy does well, the TSX should get back to new highs,” Picardo said.

Eight of the 10 main sectors on the index were in the red on Wednesday.

Shares of energy producers gave back 1.2 percent, reflecting weakness in the price of U.S. crude oil. Suncor Energy Inc (SU.TO) lost 1 percent to C$43.04 and Canadian Natural Resources Ltd (CNQ.TO) shed 0.9 percent to C$45.34.

The materials sector, which includes mining stocks, declined 0.9 percent, with commodity prices showing choppiness. Goldcorp Inc (G.TO) fell 1.6 percent to C$27.34, and First Quantum Minerals Ltd (FM.TO) was down 0.9 percent at C$22.79.

Editing by Peter Galloway and Grant McCool

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