Closing Bell TSX ends higher after Bank of Canada maintains interest rate

by admin

TORONTO — The Bank of Canada’s widely anticipated decision to keep its key interest rate unchanged helped the Toronto stock market end higher on Wednesday.The S&P/TSX composite index gained 36.43 points to close at 13,988.20, while the Canadian dollar fell 0.95 of a cent to 90.19 cents US.The central bank kept the interest rate at 1%, while noting that inflation has been lower than expected and won’t return to its ideal target of 2% until 2016 even though the domestic economy has shown signs of improvement. The comments raised the possibility that interest rate hikes are even further in the future.“As far as the interest rate scenario goes, it’s pretty much in line with what we’ve been saying for the last 18 months, which is there’s not a lot of room to move here,” said Randy Leclair, Canadian fixed income strategist at Manulife Financial.He highlighted that competition in the Canadian retail industry and a lack of significant economic growth were factors in the central bank’s latest comments.“All of these things have a potential to be a further drag on the economy and I think we need to be concerned about that,” Leclair said.In commodities, the February gold bullion contract slipped $3.20 to US$1,238.60 an ounce, and pulled down the TSX gold sector.Weakness in the precious metal came after Morgan Stanley scaled back its expectations for gold prices over the next two years and suggested equity markets won’t need the safe haven of the precious metal as much as they did when economies were more pained.The report cut target prices by 12% to US$1,160 an ounce in 2014 and by 13% to $1,138 in 2015.March copper fell 1.4 cents to US$3.34 a pound.Financial stocks rose 0.3% as Manulife Financial (TSX:MFC) gained 31 cents to $22.21.The energy sector was up 0.7% as the March crude oil contract moved up $1.76 to close at US$96.73 a barrel, its highest level of the year.Information technology stocks were the biggest gainer, rising 2.1%, with shares of BlackBerry ahead 9.9%, or $1.08, to $11.96.BlackBerry (TSX:BB) announced Tuesday that it is selling the majority of its commercial real estate holdings in Canada, but the struggling smartphone maker refused to say how much it expects to make from the deals.The company has been trying to change the course of its money-losing operations under the leadership of new CEO John Chen. BlackBerry shares are up about 50% from the start of the year.On Wall Street, the Dow Jones industrials dropped 41.10 points to 16,373.34, the Nasdaq was 17.24 points higher at 4,243 and the S&P 500 index moved up 1.06 points to 1,844.86.Weighing on the market were disappointing financial results from IBM Corp. after market close on Tuesday.IBM reported that fourth-quarter net income grew 6%, surpassing Wall Street’s expectations even though revenue declined. Chief executive Ginni Rometty said she’s recommending that senior executives, including herself, forgo personal bonuses for the year.Shares of IBM were down 3.3% to US$182.25.In other corporate developments, Air Canada (TSX:AC.A) said its domestic pension plans had a small surplus as of Jan. 1, according to preliminary estimates — contrasting with a $3.7-billion solvency deficit a year earlier. Shares of the airline were up 8.5%, or 76 cents, to $9.68.TransCanada Corp. (TSX:TRP) shares gained 37 cents to $48.84 as it officially started shipping crude oil on the southern portion of its controversial Keystone XL pipeline.The Canadian Press

Continue Reading

Leave a Reply

Your email address will not be published.