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TSX up after U.S. Fed comments ease market concerns

Reuters
A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014. REUTERS/Mark Blinch

By John Tilak

TORONTO (Reuters) - Canada's main stock index hit its highest level in more than a week on Wednesday after the U.S. Federal Reserve opened the door further to the possibility of an interest rate increase.

The U.S. central bank's comments were released after a two-day policy meeting and were less hawkish than expected. The bank provided more clarity about plans to raise interest rates, but stopped short of saying when that could happen.

Oil prices rebounded sharply after the statement as the U.S. dollar weakened, paring early losses on increasing crude inventories. The shares of energy producers rose as well, with the overall sector up 2.6 percent. [O/R]

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The benchmark TSX gained for a third straight session.

“The equity markets are certainly applauding the decision. This could mean that they are not going to be quick in raising rates,” said Philip Petursson, managing director of capital markets & strategy at Manulife Asset Management.

“The Fed is still cautious and wary about the sustainability of economic growth. They are taking baby steps to a full-blown tightening cycle.”

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) closed 63.71 points, or 0.43 percent, higher at 14,962.24. Eight of the 10 main sectors on the index were higher.

Among energy companies, Suncor Energy Inc (Toronto:SU.TO - News) shares jumped 2.3 percent to C$35.93 and Encana Corp (Toronto:ECA.TO - News) rose 3.1 percent to C$14.35.

The gold-mining sector added 3.7 percent, reflecting strength in the bullion price. Barrick Gold Corp (Toronto:ABX.TO - News) advanced more than 4.9 percent to C$13.82 and Goldcorp Inc (Toronto:G.TO - News) was up 1.5 percent to C$23.85.

(Editing by Jeffrey Benkoe and Andre Grenon)