* TSX closes 63.94 points lower at 12,170.57
* Gold miners gain after bullion rallies to record high
* Materials, energy, financial groups lower (Updates to close)
By Claire Sibonney
TORONTO, Sept 21 (Reuters) - Toronto’s main stock index ended lower on Tuesday, but moved off the day’s lows after the U.S. Federal Reserve said it stood ready to provide extra stimulus to bolster the sluggish recovery.
The Fed’s still-cautious outlook on the struggling U.S. economy raised gold’s safe-haven appeal, boosting the metal to a record high near $1,300 an ounce and lifting the stock index’s gold miners into positive territory. [GOL/]
Barrick Gold Corp (ABX.TO) was up 0.5 percent at C$48.05, rebounding from an earlier low of C$46.32, while Goldcorp Inc (G.TO) gained 0.7 percent to C$45.24 after dropping to C$44.13
The U.S. central bank made no shift in monetary policy at the end of its one-day meeting on Tuesday, but said it was “prepared to provide additional accommodation if needed to support the economic recovery,” while expressing concerns about low inflation. [ID:nN20109053]
“I don’t think we got everything that the market wanted. I believe the market probably wanted a little more clarity on what economic data they’re looking at to trigger further stimulus,” said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management in Vancouver.
“That wasn’t clarified yet and it kind of plays into politics with elections coming up, so I think the next Fed meeting will probably be more a little bit more clear.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 63.94 points, or 0.52 percent, at 12,170.57. Seven of its 10 sectors were lower, including all three of it powerhouses: materials, down 0.2 percent; energy, down 1.1 percent; and financials, off 0.9 percent.
Earlier, the TSX had declined sharply on soft commodity prices following the previous day’s rally, which pushed the TSX to its highest close since April.
The Fed’s statement did little to boost some commodity prices that are key for the TSX.
“I think a lot of it was baked into the market. Most market participants these days expect the Fed to be fairly accommodative and this was really just reassurance that they’re on that path,” Zohny said.
Crude oil futures ended lower, pressured by high inventories, and copper prices weakened. Suncor Energy (SU.TO) was down 1.6 percent at C$32.83 and First Quantum Minerals (FM.TO) dropped 0.8 percent to C$69.35.
Also weighing heavily, Potash Corp POT.TO dropped 1.3 percent to C$150.55 after BHP Billiton’s (BHP.AX) chief executive said the Anglo-Australian miner was prepared to walk away from its bid for the world’s largest fertilizer maker if a rival were to offer a price that exceeds the point at which BHP sees value for its shareholders. [ID:nN21172221]
On the upside, Research In Motion RIM.TO jumped more than 4 percent to C$48.29 after a senior Indian source told Reuters the government was in talks with the smartphone company for access to BlackBerry corporate emails. [ID:nSGE68K0JU]
($1=$1.03 Canadian) (Reporting by Claire Sibonney; editing by Peter Galloway)