The Toronto stock market was slighty higher Thursday, a day after U.S. Federal Reserve chair Janet Yellen rattled traders by indicating interest rates could be headed higher earlier than thought.
The S&P/TSX composite index initially fell 40.32 points before climbing almost 60 points to 14,354.00.
The Canadian dollar was down 0.17 of a cent to 88.76 cents (U.S.) after tumbling almost 9/10s of a cent Wednesday.
U.S. indexes also opened lower after the Fed ended its policy meeting by reaffirming its plan to keep short-term rates low. But it no longer mentions a specific unemployment rate that might lead it eventually to raise rates. The Fed says instead it will monitor a wide range of economic data before approving any rate increase.
Later, Fed chair Janet Yellen signalled that the U.S. central bank could begin raising short-term rates six months after it halts its bond purchases around year’s end. The Fed has been cutting back on those purchases, a key element of stimulus that had kept long-term rates low and said Wednesday it would further taper purchases by another US$10-billion a month to $55-billion.
The three main U.S. indexes have since moved into positive territory. The Dow Jones industrials is up 41.92 points to 16,264.09, the Nasdaq climbed 5.86 points to 4,313.46 and the S&P 500 index climbed 3.73 points to 1,864.50.
“With the new vague guidelines for forward guidance including just about everything except the kitchen sink, the Fed can do just about anything with rates, including raising them sooner than anticipated,” observed BMO Capital Markets senior economist Sal Guatieri.
On the commodity markets, nervousness about Chinese growth continued to pummel copper prices with the May contract falling five cents to US$2.94 a pound and the base metals sector fell 0.76 per cent. The metal has tumbled more than nine per cent since March 6.
There have been worries that commodity financing deals in China could unravel. Such an event could also result in widespread metals liquidation.
And on Thursday, Goldman Sachs lowered its 2014 gross domestic product forecast for China to 7.3 per cent from 7.6 per cent.
Oil prices also fell with the April contract down 52 cents to $99.85 (U.S.) a barrel and the energy sector declined 0.3 per cent.
The gold sector was slightly lower as hopes that the Ukraine crisis won’t worsen continued to weaken bullion prices and the April contract lost $16 to $1,325.30 an ounce.
In corporate news, Osisko Mining Corp., which is fighting off a hostile takeover bid by Goldcorp Inc., says that its flagship Canadian Malartic mine is expected to produce between 525,000 to 575,000 ounces of gold this year, up from 475,277 ounces in 2013. But cash costs per ounce are estimated to be between $580 and $635, down as much as 24 per cent from last year. Osisko gained one cent to $7.60 (Canadian).
International Enexco Ltd. is to be split up, with its uranium assets going to Denison Mines Corp. and its copper assets being added to a new company with projects in Nevada and Alaska. Denison shares gained seven cents to $1.81 while International Enexco jumped 11 cents to 50 cents.