Canada Stocks Rise With Gold as Fed Minutes Hint at Rate Hike

  • Fed decision to hold rates steady in September a close call
  • Toronto-Dominion Bank agrees to sell U.K. stockbroker business

TSX Movers: Ivanhoe Mines, Questerre, Silver Standard

Canadian stocks halted three days of declines as miners rallied with groups that pay high dividends as the Federal Reserve’s latest meeting minutes showed officials continue to favor only gradual increases in U.S. interest rates.

The S&P/TSX Composite Index rose 0.5 percent to 14,618.97 at 4 p.m. in Toronto. The gauge has retreated 0.7 percent so far in October after capping a third monthly gain. The index is up 12 percent this year, making it the third-best performing developed market equity index in the world just behind the U.K. and New Zealand.

Nine of 11 industries in the benchmark for Canadian equity advanced Wednesday, led by a 1.9 percent climb among raw-materials producers. Real-estate, utilities and consumer-staples stocks rose at least 1 percent.

Gold miners jumped as the price of the metal for immediate delivery added 0.2 percent in New York, holding near the lowest level in four months. Gold has fallen on speculation the Fed will raise rates this year. Officials at the September meeting said a “reasonable argument could be made either for an increase at this meeting or for waiting for some additional information on the labor market and inflation.”

Traders have now priced in a 68 percent chance the Fed will increase interest rates in December, a modest increase from before the minutes were released, according to data compiled by Bloomberg. A gauge measuring the dollar against its major peers advanced a third day to trade at the highest in seven months. Gold is less attractive in an environment of rising rates because it doesn’t pay a yield, while a firming greenback is generally negative for commodities priced in U.S. dollars.

Oil and gas companies lost 0.1 percent, paring an earlier retreat, as crude fell 1.2 percent in New York, holding near $50 a barrel for a second day of losses. Crescent Point Energy Corp. and Husky Energy Inc. lost at least 2.6 percent.

Enbridge Inc. added 1.1 percent, reversing an earlier decline. Protesters seeking to stop construction of an oil pipeline in North Dakota temporarily shut five pipelines. Protesters used bolt cutters to tamper with valves in an attempt to disrupt a pipeline in Minnesota, forcing Enbridge to shut two of its main lines as a precaution.

Commodities producers remain the top-performing industries in Canada this year, fueling a rebound in the wider gauge after a weak 2015 when the benchmark equity gauge posted its worst loss since the 2008 financial crisis. The S&P/TSX Materials Index is up 38 percent and set to halt its longest yearly losing streak since 1988. Energy producers are second with a 25 percent gain.

Canadian stock valuations remain 16 percent higher than their U.S. peers, with the S&P/TSX carrying a price-to-earnings ratio of 23.3 compared with 20.2 for the the S&P 500 Index, according to data compiled by Bloomberg.

Before it's here, it's on the Bloomberg Terminal.