* TSX up 77.56 points at 13,517.67
* Seven of 10 sectors stronger
* BoC leaves rates steady at 1 percent (Updates with details, commentary)
By Claire Sibonney
TORONTO, Jan 18 (Reuters) - Toronto’s main stock index rallied on Tuesday, driven by solid commodity prices and resource issues, as well as financials, after the Bank of Canada held interest rates steady.
All three heavyweights — financials, energy and materials — were firmer.
The top gainers were gold and base-metal miners, up 1.8 percent and 1.2 percent respectively, as the price of metals drew strength from a weaker U.S. dollar. Barrick Gold Corp (ABX.TO) advanced 1.5 percent to C$47.58 and Teck Resources TCKb.TO climbed almost 2 percent to C$63.20. [GOL/] [MET/L]
Financials added 0.2 percent, boosted by the outlook for continued low interest rates after the central bank kept its overnight target at 1 percent, as expected.
“The Bank of Canada indicating that they aren’t going to change interest rates for the time being is being taken as good news,” said Michael Sprung, president of Sprung & Co. Investment Counsel. “The banks are happy with that, so that should help their net interest margin a little bit here.”
Sprung said investors have been worried about what another rate hike or bullish commentary from the central bank would do to a high-flying Canadian dollar.
“I think people were worried about what that would do in terms of the pressure it would put on the dollar at a time when manufacturing is finding it tougher to compete with the dollar up where it is.”
Going into the announcement, the Canadian currency hit a two-and-a-half year high. It softened slightly after the Bank of Canada announcement, but remained above parity against the greenback. [CAD/]
Royal Bank of Canada (RY.TO) rose 0.4 percent to C$54.18 and Toronto-Dominion Bank (TD.TO) gained 0.3 percent to C$76.36. TD owns a 46 percent stake in U.S. brokerage TD Ameritrade Holding Corp (AMTD.O), which reported a rise in quarterly profit on Tuesday. [ID:nN16244192]
DundeeWealth DW.TO rose 1.5 percent to C$21.60 after its board of directors approved the payment of a special cash dividend of C$2 a share. As well, Bank of Nova Scotia (BNS.TO), down 0.1 percent at C$56.65, extended the deadline on its offer to buy shares of the company it does not already own. [ID:nN18125711]
At 10:25 a.m. (1525 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 77.56 points, or 0.58 percent, at 13,517.67. Seven of its 10 main sectors were stronger, including energy shares, up 0.7 percent, despite a slip in oil prices. [O/R]
“This has been a very, very hyper-sensitive market that we’re in and so it wouldn’t take much to change sentiment as we’ve seen of late,” added Sprung.
“Investors are getting more confident that a recovery is taking place, but there are still lingering doubts as to the sustainability of that recovery.”
In individual company news, Brookfield Asset Management (BAMa.TO) shot up 1.5 percent to C$32.79 after it agreed to buy 113.3 million shares of mall operator General Growth Properties Inc GGP.N from Fairholme Fund for about $1.7 billion. [ID:nN18195468]
Tim Hortons Inc THI.TO dropped 1.7 percent to C$40.61 after a rating cut by RBC. [ID:nWNAB5183] (Reporting by Claire Sibonney; editing by Rob Wilson)