TSX climbs as Fed comments ease market concerns

By John Tilak
A sign board displaying Toronto Stock Exchange stock information is seen in Toronto
A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch

By John Tilak

TORONTO (Reuters) - Canada's main stock index advanced on Wednesday as minutes from the U.S. Federal Reserve's June meeting offered details about its stimulus program phase-out and more clarity on its ideas about raising interest rates, helping lift investor sentiment.

The Toronto stock market's benchmark index dropped in the previous two sessions as concern spread that corporate earnings may not match expectations this quarter and justify the recent runup in share prices. The index is up about 12 percent this year.

The Fed minutes showed it has begun detailing how it plans to ease the U.S. economy out of an era of loose monetary policy, indicating it will end its asset purchases in October and that Fed officials appear near agreement on a plan to manage interest rates in the future.

“They are likely to remain dovish,” said Philip Petursson, managing director, portfolio advisory group, at Manulife Asset Management. “The market is taking that as good news, that we're going to see low interest rates for a considerable amount of time."

The Toronto Stock Exchange's S&P/TSX composite index closed up 78.01 points, or 0.52 percent, at 15,215.19. Nine of the index's 10 main sectors were higher.

The gold-mining sector jumped 2.5 percent, reflecting a rise in the bullion price. Goldcorp Inc climbed 1.6 percent to C$30.19 and Barrick Gold Corp gained 1 percent to C$20.14.

Financials, the index's most heavily weighted sector, advanced 0.6 percent. Royal Bank of Canada climbed 0.9 percent to C$78.50, and Bank of Nova Scotia added 0.4 percent to C$72.16.

In corporate news, Potash Corp's chief executive said on Tuesday he will stick with the fertilizer producer's focus on supporting the price of potash by matching output of the crop nutrient to demand, rather than maximizing sales volume to fend off competition.

The stock was down 1.1 percent at C$38.98 on Wednesday.

($1=$1.07 Canadian)

(Editing by Peter Galloway)