CANADA STOCKS-TSX rises as investors brace for Fed

* TSX up 27.98 points, or 0.18 percent, at 15,510.54
    * Eight of the 10 main index sectors advance
    * Energy stocks rise with price of oil

    By John Tilak
    TORONTO, Sept 16 (Reuters) - Canada's main stock index edged
higher on Tuesday, driven by gains in most major sectors as
investors nervously awaited the outcome of a key U.S. Federal
Reserve policy meeting.
    The market expects the Fed to provide more clarity on
interest rates at the end of a two-day policy meeting on
Wednesday, with some speculating that the central bank might
raise rates earlier than had been thought. 
    "It looks there is some optimism about the Fed meeting,"
said Youssef Zohny, portfolio manager at Stenner Investment
Partners of Richardson GMP Ltd, which manages about C$28.3
billion in assets.
    "Investors will be paying attention to the (Fed's) language,
and as we've seen in the past few years, their language has been
very dovish," he added. "Investors want to see more of the same
for the rally to continue."
    Zohny said that continued economic stimulation by world
central banks could provide a lift for commodities in the medium
term. "We could see some relative outperformance of the resource
areas which have underperformed, and that should help the TSX."
     The benchmark TSX index recovered on Tuesday after
declining in the previous two sessions. It is up about 14
percent this year.
     The market also digested comments by Bank of Canada
Governor Stephen Poloz, who said recent Canadian economic data
has been encouraging, particularly on exports, but that there is
still a substantial amount of slack in the job
     The Toronto Stock Exchange's S&P/TSX composite index
 closed up 27.98 points, or 0.18 percent, at 15,510.54.
Eight of the 10 main sectors on the index were higher.
    Shares of energy producers added 0.4 percent after the price
of oil bounced higher. Suncor Energy Inc gained 0.9
percent to C$43.47, and Canadian Natural Resources Ltd 
advanced 0.7 percent to C$45.74. 
    The materials sector, which includes mining stocks,
strengthened as commodity prices rose. Diversified miner Teck
Resources Ltd climbed 1.5 percent to C$23.68, and
fertilizer producer Potash Corp was up 1.2 percent at
    In corporate news, the outgoing chief executive of
Toronto-Dominion Bank, Ed Clark, said the Canadian
government should tighten lending rules further to discourage
consumers from taking on too much debt in an environment of low
interest rates. 
    TD's stock was down 0.2 percent at C$57.47. 
    ($1=$1.10 Canadian)

 (Editing by Peter Galloway)