Canadian stocks surge after Fed holds off interest rate hike

Canada's main stock market surged to a two-week high as the U.S. Federal Reserve ruled against a interest rate raise.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index gained 188.84 points, or 1.30 percent, to close at 14,710.82 points. All ten of the index's sub-sectors grew during the trading day.

The U.S. Federal Open Market Committee (FOMC) voted 7 to 3 in favor of keeping the federal funds rate at 0.25 percent to 0.50 percent.

Many believe that an impending rate hike is likely to be warranted from FOMC in upcoming meetings in November and December.

"We expect the committee (FOMC) to pull the trigger on rates later this year, assuming that global markets don't convulse and U.S. data cooperates," said Michael Dolega, a senior economist of Toronto-Dominion Bank.

Oil prices soared on Wednesday, with U.S. light sweet crude for November delivery advancing 1.53 U.S. dollars to 45.58 dollars a barrel in New York. In London, Brent crude for November delivery rose 1.21 dollars to close at 47.09 dollars a barrel.

The TSX Materials group, which includes miners of gold and other precious metals, jumped 4.57 percent on the trading day. Gold miners Barrick Gold Corporation and Kinross Gold Corporation saw shares spike 7.93 percent and 7.08 percent, respectively to 24.51 Canadian dollars (18.71 U.S. dollars) and 5.90 Canada dollars (4.50 U.S. dollars).

TSX energy group also had a strong day, ending Wednesday up 1.80 percent. Calgary-based gas and oil producer, Encana Corporation was heavily traded during the day, with stocks advancing 0.21 Canadian dollars a share to 12.25 Canadian dollars (9.35 U.S. dollars).

On the economic front, Statistics Canada released wholesale sales data in July earlier in the day, which grew 0.3 percent to $56.5 billion Canada dollars (43.2 U.S. dollars), a fourth consecutive month of increase.

The Canadian dollar was gained on Wednesday to close at 0.7632 U.S. dollars, compared to Tuesday's closing rate of 0.7569 U.S. dollars.

Source : XINHUA