April 28, 2010 / 7:23 PM / 9 years ago

CORRECTED - CANADA STOCKS-TSX pares losses after Fed statement

(Corrects headline to say TSX index pares earlier losses, not gains)

* TSX off 0.03 percent at 12,142.50

* Seven TSX sectors lower, but losses pared

* Gold producers shine as bullion climbs

* Fed’s economic view brightens, low rate vow holds (Updates following Fed decision)

By Ka Yan Ng

TORONTO, April 28 (Reuters) - Toronto’s main stock index pared early losses to sit largely unchanged on Wednesday afternoon, after the U.S. Federal Reserve left interest rates unchanged near zero and offered a brighter economic view, lifting key resource and financial groups.

The U.S. central bank renewed its promise to keep rates low for an “extended period” and, at the conclusion of a two-day meeting that took place against the backdrop of financial turmoil in Europe, said U.S. consumer and business spending were picking up steam. [ID:nN27125552]

“The (Federal Open Market Committee) statement was very friendly for equity markets. They maintained their dovish stance and subtly upgraded their assessment of the economy,” said Fergal Smith, managing market strategist at Action Economics.

At 2:50 p.m. (1850 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 4.24 points, or 0.03 percent, at 12,142.50. Eight of the 10 groups were down.

The price of crude oil added to gains after the Fed’s statement, helping the energy group edge into positive territory, up 0.02 percent. [O/R] Imperial Oil (IMO.TO) added 1.3 percent to C$43.25.

The heavyweight materials group, well-supported by broad gains from gold producers, with bullion prices rallying to their best level in almost five months, was up more than 2 percent. [GOL/]

Goldcorp (G.TO) was ahead 4.3 percent at C$43.46, while Agnico Eagle (AEM.TO) jumped 4 percent to C$64.64. Base metals producer Teck Resources TCKb.TO gained 1.7 percent to C$41.76.

Early action was weighed down by nervousness over sovereign risk contagion in the euro zone, where Spain was hit by a ratings downgrade, following Greece and Portugal.

However, news that Greece will soon receive extra help in servicing its debts helped ease some of the fears. Reaction was also muted following Wednesday’s downgrade of Spain. [ID:nWNA9804]

$1=$1.01 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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