* TSX rises 97.29 points, or 0.76 percent, to 12,931.40
* Five of the 10 main index sectors advance
* Gold-mining shares jump 8.7 percent
* CNOOC debuts on Toronto exchange
* BlackBerry drops after new smartphone launch
By John Tilak
TORONTO, Sept 18 Canada's main stock index
climbed to its highest point in more than two years on
Wednesday, led up by a jump in gold producers after the U.S.
Federal Reserve said it would keep its monetary stimulus
measures in place for now.
The Fed's surprise announcement unleashed a flood of buying
in the Toronto market as investors took positions in
heavy-volume trading. The market in general had expected the Fed
to scale back its stimulus program.
High-yield sectors such as REITs, utilities and telecoms
clocked solid gains as they tend to thrive in a low
interest-rate environment. But insurers slipped.
Shares of gold miners surged 8.7 percent, posting their
biggest jump in about four years. The price of gold soared 4.2
The Fed said it would continue buying bonds at an $85
billion monthly pace, citing strains in the economy from tight
fiscal policy and higher mortgage rates.
"People are extremely surprised. All life-support systems
remain for the time being," said Matt Skipp, president of SW8
Asset Management, a Toronto-based hedge fund.
"Obviously the markets are taking a big leg up as a result,"
he added. "But there might be moments of introspection when you
realize they don't have enough confidence in the economy to
begin to taper."
Skipp said he doubled his exposure to gold-mining stocks to
10 percent of his portfolio after the Fed statement.
The Toronto Stock Exchange's S&P/TSX composite index
closed up 97.29 points, or 0.76 percent, at 12,931.40,
after rising as high as 12,958.88, its highest level since
About 382 million shares changed hands, compared with an
average daily volume of about 291 million shares in August,
according to market operator TMX Group.
"The Fed is still priming the pump, so it looks like
everyone's jumping on the bus," said Elvis Picardo, strategist
at Global Securities in Vancouver. "It does seem that the money
that was on the sidelines is coming pouring in."
"Interest is starting to come again into the TSX," he added.
"If the U.S. and global economies continue to do well, it's very
hard to make a bearish case for the TSX, and the bulls would
prevail in that case."
The benchmark Canadian index is up nearly 6 percent this
Five of the 10 main sectors on the TSX were higher on
The materials sector, which includes mining stocks, rose 5.1
percent, helped by the gains in gold producers.
Barrick Gold Corp was up 9.5 percent at C$20.66,
and Goldcorp Inc added 7.8 percent to C$29.19. The two
stocks playing the biggest role in leading the index higher.
Financials, the index's most heavily weighted sector, lost
0.3 percent, with most major banks and insurers slipping.
Toronto-Dominion Bank gave back 0.3 percent to
C$91.15. Manulife Financial Corp dropped 2.1 percent to
C$17.58 and was one of the most influential decliners, while Sun
Life Financial Inc slipped 0.9 percent to C$33.29.
BlackBerry fell more than 2 percent to C$10.64 after
launching a new flagship smartphone. Separately, the Wall Street
Journal said BlackBerry plans to slash thousands of jobs by the
end of the year, a report the company declined to comment on.
The REIT sector added 1.5 percent, utilities gained 0.9
percent, and telecoms advanced 0.7 percent.
China's top offshore oil explorer, CNOOC Ltd, made
its long-awaited debut on the Toronto Stock Exchange on
Wednesday under the symbol "CNU".
CNOOC last year promised to cross-list its shares in Canada,
as part of undertakings made to the Canadian government to win
approval of its $15.1 billion acquisition of Canadian oil and
gas company Nexen Inc.