CANADA STOCKS-TSX gains for second day as economic data supports

Wed Sep 4, 2013 5:14pm EDT

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* TSX rises 17.31 points, or 0.14 percent, to 12,757.81
    * Seven of 10 main index sectors advance
    * CN Rail, CP Rail lead the market higher

    By John Tilak
    TORONTO, Sept 4 (Reuters) - Canada's main stock index
advanced for a second straight session on Wednesday, led by the
industrial and financial sectors, with investors encouraged by
global economic data and the prospect of only limited military
strikes on Syria.
    Gains were limited as lower gold and crude oil prices
weighed on companies that produce those commodities.
    The Toronto market's benchmark index, which touched a
three-month high the previous session, is up about 5 percent for
the quarter to date, firming after badly lagging major global
indices in the first half of the year.
    Surveys released on Wednesday showed Chinese service-sector
growth reached a five-month high in August and euro zone
businesses recorded their best month in August in more than two
years. Separate data indicated U.S. auto sales in August rose at
their fastest pace in nearly six years. 
 
    With economic data looking stronger, investors were bracing
for the U.S. Federal Reserve to dial back its monetary stimulus
program.
    "The critical piece of the puzzle that the market is looking
at is the strength of economic data and the extent to which it
bolsters the Fed's case to begin their tapering," said Paul
Taylor, chief investment officer at BMO Asset Management.
    The data suggests that the Fed will begin pulling back on
its asset purchases in September, he added.
    Investors will now turn their focus to Friday's U.S. jobs
report, considered by many market strategists as the single
biggest indicator of the Fed's monetary direction.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 17.31 points, or 0.14 percent, at 12,757.81.
    The market was also preparing for potential tension in Syria
as Washington and Russia remained publicly at odds over U.S.
plans for a possible military strike. 
    A divided U.S. Senate Foreign Relations Committee on
Wednesday approved a resolution authorizing the use of military
force in Syria by a vote of 10-7, with one senator merely voting
"present." 
    "The biggest issue for investors is the uncertainty, and
markets hate uncertainty," said Rick Hutcheon, president and
chief operating officer at RKH Investments. "We don't know if
the Americans are going to attack, we don't know if anyone is
going to do anything."
    "All this is doing is providing an overlay of uncertainty in
a market that is trying to come to terms with the economic
realities of the U.S. and European economic recoveries."
    Seven of the 10 main sectors on the index were higher.
    Industrials jumped 1 percent. Canadian Pacific Railway Ltd
 was up 1.8 percent at C$125.97, and Canadian National
Railway Co climbed 0.8 percent to C$100.41, playing the
biggest role of any two stocks in leading the market higher.
    Financials, the index's most heavily weighted sector, added
0.2 percent. Bank of Montreal rose 0.3 percent to
C$66.80, and Royal Bank of Canada gained 0.1 percent to
C$65.48.
    The materials group, which includes mining stocks, slipped
as gold shares fell 0.2 percent. The price of bullion dropped
1.4 percent. 
    Barrick Gold Corp declined 0.6 percent to C$20.40. 
    Energy shares stumbled 0.2 percent, with Suncor Energy Inc
 down 0.9 percent at C$35.83 and having the biggest
negative influence on the market.
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