Canadian stocks higher as Fed signals caution on rates

Canada's main stock market in Toronto climbed slightly higher on Tuesday after a speech by Federal Reserve chair Janet Yellen indicated the U.S. central bank will move cautiously on further rate hikes.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index added 36.04 points, or 0.27 percent, to close at 13,426.23 points. Five of the TSX index's eight main sub-sectors were higher.

A drop in oil prices weighed on the resource-linked market, as TSX energy fell 0.56 percent. Baytex Energy Corp. was down 1.41 percent to 4.90 Canadian dollars (3.75 U.S. dollars) per share, Suncor Energy Inc. narrowed its loss to 0.81 percent to 35.51 Canadian dollars, while Athabasca Oil Corporation retreated 3.60 percent to 1.07 Canadian dollars.

Metals & mining group gained 0.45 percent as commodity prices sustained rally, with gold leading the pack, up 22 U.S. dollars to 1,244 U.S. dollars an ounce. That's good for Canadian markets, which have a heavy weighting to mining and resource stocks.

The biggest moves were made by Kinross Gold Corporation, up 10.53 percent at 4.41 Canadian dollars, and B2Gold Corp., which took in 7.58 percent to 2.27 Canadian dollars. Teck Resources experienced a 1.13 drop to 9.65 Canadian dollars.

Australia's Qube Holdings Ltd. and Canada's Brookfield Asset Management Inc. are raising a 1-billion-Australian dollar (760 million U.S. dollars) loan to help pay for the ports business of Asciano Ltd., in a carving-up of Australia's largest ports and rail operator, sources said.

The shares of Brookfield went up 0.92 percent to 44.90 Canadian dollars.

The shares of Amaya Inc. rose 12.76 percent to 16.70 Canadian dollars after the gambling website operator said its chief executive was taking an indefinite paid leave of absence.

Canadian smartphone maker BlackBerry could benefit from the U.S. Federal Bureau of Investigation's successful unlocking of the San Bernadino gunman's iPhone as major smartphone makers look to shore up security on their devices, according to technology analysts.

BlackBerry has been on a buying spree to boost its security capabilities over the last 18 months. The company hopes to extend its security services beyond smartphones into Internet of Things-based machine-to-machine communication.

BlackBerry shares went up 2.19 percent to 10.28 Canadian dollars. It is to report its fiscal fourth-quarter earnings on Friday.

On the economic calendar, Statistics Canada reported its industrial product price index moved 1.1 percent lower in February, due to lower energy and petroleum products, while its raw materials price index tailed off 2.6 percent during the same month, mainly as a result of lower prices for crude energy products.

The loonie was going stronger, mainly because the U.S. dollar fell against most other currencies.

Yellen's remarks that the Fed needs to "proceed cautiously" on rates were interpreted to mean there will not be a rate hike in April, eliminating the fear that had hung over the markets.

The Dow, which had fallen in early trading, reversed course at midday and was up 97 points to 17,633 at the close. That's its highest level this year.

"Markets are rightly taking Fed Chair Yellen's speech as being dominated by a dovish slant with the U.S. dollar depreciating against most currencies and the front-end of the Treasury curve becoming dearer alongside slightly firmer stocks," said Scotiabank Vice-President Derek Holt in a note to clients.

"Further disappointing economic reports out of the States will surly push any interest rate hikes off the table and will hit the U.S. dollar," said Michael J Smith, a Toronto currency expert at AFEX, a global non-bank provider of foreign currency services.

The Canadian dollar traded higher at 0.7654 U.S. dollar, compared with Monday's closing rate of 0.7587 U.S. dollar. Endit