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Wednesday saw the main stock index of Toronto decreasing following the reduction of the US economic growth projection by Federal Reserve. This announcement overshadowed the increase in energy and gold stocks at the TSX due to stronger commodity prices.
The S&P/TSX composite index closed lower by 0.02 percent or 2.76 points with 13,060.56. Despite the decline, six on the main groups at the index closed slightly higher. Since the US is the largest trading partner of Canada, the Fed announcement resulted to the decrease at the TSX despite a 1.6 percent increase a day earlier.
The materials sector has increased by 0.37 percent at the TSX even as solid bullion prices resulted to a 1.43 percent increase in the gold mining group. Eldorado Gold, Barrick Gold, and Goldcorp increased by 5.4 percent, 1.42 percent and 0.97 percent respectively.
Even as the price of gold has increased in the last three sessions, it has softened a little due to the continuing concerns on the sovereign debt in Europe. A stockbroker has indicated that the situation in Greece is not yet resolved and it will continue to regularly crop up and influence trading at the TSX.
The dividend increase of Iamgold last Tuesday caused the market to react positively at the TSX and enhanced the position of gold mining companies. Observers indicated that the dividend increase is one instance where gold mining companies pay shareholders as they have maintained a profitable position recently in the market.
Solid oil prices also allowed the energy group to increase by 0.12 percent at the TSX although it was also affected by the Fed announcement. Athabasca Oil Sands and Suncor Energy increased by 3.53 percent and 0.29 percent at the TSX respectively. This comes as US crude oil prices increased to $95.41 per barrel following a report which indicated that the decline in the US stockpiles was bigger than expected.
Even as the TSX decreased recently, the London Stock Exchange offered around $4.1 billion for the Toronto Stock Exchange, which surpassed the bid of a Canadian consortium.
