CANADA STOCKS-Fed hopes take TSX to 1-month high as golds soar

Thu Jul 11, 2013 11:26am EDT

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* TSX rises 107.41 points, or 0.87 percent, to 12,414.34
    * Seven of 10 main index sectors advance
    * Barrick, Goldcorp have biggest impact on market rise

    By John Tilak
    TORONTO, July 11 (Reuters) - Canada's main stock index
jumped to a 1-month high on Thursday after comments by U.S.
Federal Reserve Chairman Ben Bernanke showed continued support
for the Fed's stimulus program, fueling a surge in bullion
prices and in gold-mining stocks.
    Most index sectors were up, but gold producers showed the
sharpest gain, climbing 4.4 percent. Barrick Gold Corp 
was up 5.3 percent and Goldcorp Inc rose 4.8 percent,
with the two having the biggest influence on the index's rise.
 
    Bernanke said on Wednesday the Fed must keep a stimulative
monetary policy in place due to weak U.. inflation levels and a
high unemployment rate. 
    The comments buoyed global markets and took the Toronto
index briefly back to positive territory for the year so far.
    "The market has perhaps got a little bit overexcited about
what the Fed said," said Peter Westaway, chief economist at
Vanguard Asset Management Ltd, a unit of Vanguard Group Inc.
"I'm slightly surprised quite how much the market has taken it
as a signal that policy is going to be looser for much longer."
     The Toronto Stock Exchange's S&P/TSX composite index
 was up 107.41 points, or 0.87 percent, at 12,414.34,
after reaching 12,441.16, its highest in more than a month. The
index gained for a fourth straight session.
    Seven of the 10 main sectors on the index were higher.
    The materials sector, which includes mining stocks, gained
3.1 percent, helped by the advances in gold-mining stocks. The
bullion price rose to a near three-week high. 
    Financials, the index's most heavily weighted sector, were
up 0.3 percent. Royal Bank of Canada, the country's
biggest lender, climbed 0.5 percent to C$61.53, and Bank of
Montreal < BMO.TO> rose 0.7 percent to C$62.66.
    Energy shares were up 0.8 percent. Canadian Natural
Resources Ltd advanced 2.3 percent to C$33.42, and
Enbridge Inc gained 1 percent to C$45.61.
    Westaway said the aggressively accommodative policies that
global central banks have adopted have taken markets into
uncharted territory. "There's no track record for markets to
fall back on. There's no playbook for policymakers to look at."
    "Overall, the global economy is on the mend, but there are
still downside risks," he added, saying he sees a gradual
stimulus rollback. "I don't think investors can sleep easy."
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