TORONTO (Reuters) - Canada’s main stock index rose on Tuesday, reversing earlier losses as dovish comments from Federal Reserve Chair Janet Yellen helped support gold mining stocks.
Yellen said the U.S. central bank should proceed “cautiously” as it looks to raise interest rates, because inflation has not yet proven durable against the backdrop of looming global risks to the U.S economy.
The Fed’s cautious stance is “great for asset prices for now and as an asset manager we are going make sure we take advantage,” said Diana Avigdor, head of trading at Barometer Capital Management.
Although she worries that “it is not working to actually spur top line growth in companies.”
The materials group rose 2.7 percent, led by gold mining stocks. Franco-Nevada Corp FNV.TO rose 4.3 percent to C$83.56, while Kinross Gold was up 10.5 percent at C$4.41.
Spot gold XAU rose 1.6 percent as lower interest rates reduced the opportunity cost of holding non-yielding bullion.
The shares of Amaya Inc AYA.TO rose 12.8 percent to C$16.70 after the gambling website operator said its chief executive was taking an indefinite paid leave of absence.
Consumer discretionary stocks rose 0.8 percent, while industrials advanced 0.7 percent.
Australia's Qube Holdings Ltd QUB.AX and Canada's Brookfield Asset Management Inc BAMa.TO are raising a A$1 billion ($753 million) loan to help pay for the ports business of Asciano Ltd AIO.AX, in a carve-up of Australia's largest ports and rail operator, people familiar with the transaction said.
The shares of Brookfield rose 0.9 percent to C$44.90.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 36.04 points, or 0.27 percent, at 13,426.23. It touched its highest since March 23 at 13,443.80.
Six of the index’s 10 main groups were higher.
Among the drags on the index were energy and financial sector stocks.
The energy group fell 0.6 percent, pressured by the drop in oil prices. U.S. crude CLc1 prices settled at $38.28 a barrel, down 2.8 percent.
The heavyweight financials group was down 0.2 percent, including a decline in the shares of life insurance companies.
Valuation concerns and low net interest margins are headwinds for the financials group, said Avigdor.
SNC Lavalin Group Inc SNC.TO is expecting record revenues this year from its Middle East energy operations despite sluggish oil prices, an executive from the global construction and engineering firm said.
Still, the company’s shares dipped 0.2 percent to C$46.57.
Reporting by Fergal Smith; Editing by James Dalgleish and Sandra Maler
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