TSX rallies to two-month high on Fed comments, led by miners
( well... led by "most miners")
By John Tilak
TORONTO (Reuters) - Canada's main stock index rose on Wednesday to a two-month high, helped by gains across most major sectors on optimism that the U.S. Federal Reserve will keep its easy money policy in place for now.
Fed Chairman Ben Bernanke said the central bank's monetary stimulus is helping the U.S. economy recover, and the central bank needs to see further signs of traction before taking its foot off the gas.
Bernanke's testimony fueled a jump in the price of bullion, which often rises on commentary backing easy monetary policies, and lifted shares of gold companies.
"Gold has rallied after the up-and-down performance of the last two weeks," said John Ing, president of Maison Placements Canada. "The silver lining is the drop in gold has sparked tremendous physical buying."
Ing does not see the current easy money policy as sustainable and said the end of monetary stimulus was inevitable.
"The market, like a drug addict, is addicted to lower interest rates," he said. "Even hints of higher interest rates are enough to remove the props from the market."
The resource-heavy market advanced for the fourth straight session and, with Wednesday's gains, is up more than 3 percent on the year.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) was up 110.48 points, or 0.87 percent, at 12,852.91. It hit a session high of 12,856.99 earlier.
Nine of the 10 main sectors on the index were higher.
Gold shares, down about 37 percent since the start of the year, gained more than 4 percent and helped lift the materials sector nearly 3 percent.
Goldcorp Inc (Toronto:G.TO - News) rose 4 percent to C$28.45, and Barrick Gold Corp (Toronto:ABX.TO - News) added 3.6 percent to C$20.60.
Energy shares rose 1.1 percent.