TSX Ends Higher On Economic Growth Optimism - Canadian Commentary

(RTTNews) - Canadian stocks ended higher, driven by financial and energy stocks after the International Monetary Fund raised its global economic growth forecast, even as Bank of Canada left its interest rates unchanged.

As widely expected, Bank of Canada decided to retain its interest rate at 1.0 percent, while indicating the course of its future policy will depend on economic data. The central bank also projected the inflation rate to average 0.9 percent in the first quarter. The central bank's move sent the Canadian dollar to a more than four-year low.

Elsewhere, the Asian markets ended higher after China moved towards its Lunar New Year holidays with more liquidity in the system. European stocks ended mostly higher with investors latching on to the IMF world economic growth projections.

The S&P/TSX Composite Index closed Wednesday at 13,988.20, up 36.43 points or 0.26 percent. The index scaled an intraday high of 13,999.58 and a low of 13,933.58.

Gold futures ended lower on speculations the Federal Reserve would further taper down its quantitative easing program, with little or no economic releases for cues.

The Global Gold Index shed 1.65 percent, with gold futures for February delivery, the most actively traded contract, edging down $3.20 or 0.3 percent to close at $1,238.60 an ounce Wednesday on the Nymex.

Among gold stocks, Goldcorp Inc. (G.TO) added 0.93 percent, while Barrick Gold Corp. (ABX.TO) slipped 1.33 percent. Yamana Gold Inc. (YRI.TO) dropped 1.58 percent, while Kinross Gold Corp. (K.TO) surrendered 2.28 percent.

B2Gold Corp. (BTO.TO) plunged 4.03 percent, despite having reported a jump in fourth-quarter gold revenues.

The Capped Materials Index dropped 1.22 percent, with fertilizer giant Potash Corp. of Saskatchewan Inc. (POT.TO) slipping 0.16 percent and Agrium, Inc. (AGU.TO) down 0.30 percent.

Crude oil surged ahead of the official weekly oil report, driven mostly by brighter demand growth prospects after the International Energy Agency in a monthly report raised its demand growth forecast.

The Energy Index added 0.69 percent, with U.S. crude oil futures for March delivery, the most actively traded contract, surging $1.76 or 1.9 percent to close at $96.73 a barrel Wednesday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) added 1.09 percent, while Suncor Energy Inc. (SU.TO) gained 1.31 percent. Talisman Energy Inc. (TLM.TO) jumped 2.92 percent, while Encana Corp. (ECA.TO) added 2.49 percent.

The Information Technology Index jumped 2.13 percent, with smartphone maker BlackBerry Limited (BB.TO) surging 9.93 percent, after indicating it would sell the majority of its real estate holdings in Canada. BlackBerry indicated the move will further boost its financial flexibility and raise additional cash to support operations.

The Diversified Metals & Mining Index dropped 1.48 percent, with Teck Resources Limited (TCK.B.TO) down 2.42 percent and First Quantum Minerals Ltd. (FM.TO) down 0.67 percent. Lundin Mining Corp. (LUN.TO) ended flat at $5.11 a share.

The heavyweight Financial Index gained 0.31 percent with Bank of Montreal (BMO.TO) adding 0.43 percent and Royal Bank of Canada (RY.TO) up 0.27 percent. The Bank of Nova Scotia (BNS.TO) surrendered 0.22 percent, while Toronto-Dominion Bank (TD.TO) moved up 0.33 percent.

The Capped Industrials Index gained 0.35 percent with Bombardier Inc. (BBD.A.TO, BBD.B.TO) dropping 1.01 percent.

In economic news, unemployment rate in the U.K. fell rapidly to the level close to the central bank's 7 percent threshold for an interest rate hike. Nonetheless, policymakers of the Bank of England said there was no immediate need to raise interest rates, even if the threshold is reached. The jobless rate dropped to 7.1 percent for the September to November period, just above the BoE's threshold, data from the Office for National Statistics showed Tuesday. The rate was below the 7.3 percent forecast by economists and the 7.7 percent posted during the June-August quarter. This was also the lowest rate ever recorded since the December to February period of 2009.

Meanwhile, the gross debt of Eurozone governments narrowed in the third quarter, marking the first decline in nearly six years, data from Eurostat revealed Wednesday. Total government debt in the bloc dropped to 92.7 percent of gross domestic product (GDP) at the end of September quarter from 93.4 percent in the second quarter. It was the first decline since the fourth quarter of 2007.

The Bank of Japan on Wednesday kept its monetary easing plan unchanged and retained its inflation forecast for the next two years, strengthening expectations that the central bank may keep the policy steady at least for now, with consumer prices evolving in line with its forecasts. The Japanese central bank will keep the target of the monetary base expansion at an annual pace of JPY 60-70 trillion.