TSX ends losing streak as Fed clears uncertainty on rate outlook

TORONTO, Dec 15 (Reuters) – Canada’s main stock index rose on Wednesday, clawing back some recent losses, as a signal by the Federal Reserve that it would raise interest rates in 2022 reduced a source of uncertainty for investors.

The Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) ended up 120.59 points, or 0.6%, at 20,769.16, its first higher close since Dec. 7.

Wall Street also rallied after the Fed issued new economic projections showing three rate hikes in the cards next year and said it would end its pandemic-era bond purchases in March. read more

“The Fed decision … that puts a little bit more certainty into people’s ideas of what could happen,” said Michael Sprung, president of Sprung Investment Management. “I think going into today people were still pretty worried about inflation in particular and what the Fed’s response might be.”

Domestic data showed that the annual inflation rate remained at 4.7% in November, the highest since March 2003, as supply-chain disruptions continued to exert upward pressure on prices. read more

“There is trepidation that we could be slipping backwards a little bit in the fight against COVID, but I think still the market is taking the overall view that this is going to be a temporary situation,” Sprung said.

Canada’s government implored residents not to leave the country as provinces ramp up vaccinations to combat the fast-spreading Omicron coronavirus variant. read more

Technology shares on the Toronto market advanced 1.4%, while the heavily weighted financials sector was up 0.9%.

Resource shares were a drag, with the energy sector dipping 0.1% and the materials group, which includes precious and base metals miners and fertilizer companies, losing 0.6%.

Prices of copper and most other industrial metals fell as data from China, the biggest consumer, pointed to slowing economic growth and therefore weaker demand for metals. read more

Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Peter Cooney

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