CANADA STOCKS-Fed talk lifts sentiment, TSX hits 3-week high

Wed Jul 10, 2013 5:30pm EDT

* TSX rises 9.84 points, or 0.08 percent, to 12,306.93
    * Five of 10 main sectors decline
    * BlackBerry slips after analyst report

    By John Tilak
    TORONTO, July 10 (Reuters) - Canada's main stock index
advanced on Wednesday to its highest in three weeks as investor
sentiment improved after U.S. Federal Reserve meeting minutes
suggesting a balanced stimulus pullback, offsetting weak trade
data out of China.
    The Toronto market extended its gains to a third straight
session as it received help from shares of energy producers and
retailer Alimentation Couche-Tard.
    Investors closely watched as China, a big consumer of
Canada's commodity exports, warned of a "grim" outlook for trade
after a surprise fall in June exports, raising fresh concerns
about the extent of the slowdown in the world's second-largest
economy. 
    But the market's big focus was on monetary policy as
consensus built within the Federal Reserve in June about the
likely need to begin pulling back on economic stimulus measures
soon, while many officials wanted more reassurance the
employment recovery was on solid ground before a policy retreat.
 
    "The Fed is very methodically correcting some of the
overreaction that we're seeing," said Karl Schamotta, senior
market strategist at Western Union Business Solutions.
    "I don't think they want to rock the boat intentionally," he
added. "(But) ... they want to put a ceiling on the froth in the
market because that froth is unsustainable."
    Schamotta expects the Fed to support the economy without
undoing the reforms the central bank has been putting into play.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 9.84 points, or 0.08 percent, at 12,306.93. 
    Five of the 10 main sectors on the index were higher.
    Leading the gains were shares of energy companies, which
jumped 0.7 percent after oil prices surged. 
    Canadian Natural Resources Ltd rose 2.2 percent to
C$32.67, and Suncor Energy Inc was up 0.5 percent to
C$32.14.
    Couche-Tard rallied 6.3 percent to C$62, a day after the
stock tumbled on weaker-than-expected quarterly results.
    BlackBerry lost 3.9 percent to C$9.80 after an
analyst report said initial sales of its new mid-tier Q5 device
were weak in the United Kingdom, while sales of its other
BlackBerry 10 handsets remained lackluster. 
    The decline comes a day after the smartphone maker faced
tough questions about its future at its annual general meeting. 
    Financials, the index's most heavily weighted sector, lost
0.1 percent. Royal Bank of Canada, the country's biggest
lender, gave back 0.5 percent to C$61.23, and Bank of Montreal <
BMO.TO> fell 0.6 percent to C$62.20.
    The materials sector, which includes mining stocks, slipped
0.2 percent.
    Miner Teck Resources Ltd was down 2.5 percent at
C$21.84.
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