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Canadian stocks inch up as central bank holds rate steady

Xinhua, July 14, 2016 Adjust font size:

Canada's main stock market in Toronto continued to extend its highest level in 11 months on Wednesday as the Bank of Canada decided to stand pat again despite worries about Brexit and house prices.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index gained 16.13 point, or 0.11 percent, to close at 14,493.80 points. Three of the TSX index's eight main sub-sectors were higher.

Oil prices dropped as much as 4 percent on Wednesday as government data showed U.S. gasoline stockpiles unexpectedly increased last week.

U.S. WTI light sweet crude for August delivery lost 2.05 U.S. dollars to settle at 44.75 dollars a barrel on the New York Mercantile Exchange, while Brent crude for September delivery erased 2.21 dollars to close at 46.26 dollars a barrel on the London ICE Futures Exchange.

TSX energy sector was down 1.38 percent as Suncor Energy Inc. dropped 1.48 percent to 36.68 Canadian dollars (28.25 U.S. dollars) and Enbridge Inc. fell 1.55 percent to 54.62 Canadian dollars.

Health-care stocks took the biggest drubbing, as Valeant Pharmaceuticals shares collapsed 2.12 Canadian dollars, or 7.14 percent, to 28.11 Canadian dollars, while Concordia International lost 50 cents, or 1.84 percent, to 26.65 Canadian dollars.

Gold stocks shone brightest in the mid-week session, as Yamana Gold improved 16 cents, or 2.13 percent, to 7.66 Canadian dollars, while Barrick Gold took on 47 cents, or 1.75 percent, to 27.36 Canadian dollars.

Also strong was the consumer staples sector, with Alimentation Couche-Tard hiking 1.50 dollars, or 2.59 percent, to 59.34 Canadian dollars, while retailer Metro Inc. shares grew 77 cents, or 1.66 percent, to 47.22 Canadian dollars.

In the tech field, Canadian smartphone maker BlackBerry doffed 14 cents, or 1.59 percent, to 8.68 Canadian dollars.

Canadian home prices rose by 2.3 percent in June from a month earlier, the Teranet-National Bank Composite House Price Index showed on Wednesday, the largest increase during the month since the index began in 1999.

The index, which measures price changes for repeat sales of single-family homes, showed prices were up 10 percent from a year earlier, providing further evidence of rapid price increases in some parts of Canada.

Prices in the major cities of Vancouver and Toronto have risen sharply in recent years, boosted in part by foreign investment, while oil producing regions such as Alberta have been held back by the falling oil price and rising unemployment.

Meanwhile, the Bank of Canada on Wednesday decided to hold its benchmark interest rate steady at 0.5 percent, but warned that high house prices in some cities and the impact of Brexit are lurking risks to the Canadian economy.

The central bank also cut its growth forecast for 2016, saying exports continued to disappoint and acknowledging it may have underestimated structural challenges facing businesses.

The bank said it expects oil prices and the Canadian dollar to stay right around where they are for the rest of the year -- 49 U.S. dollars for a barrel of crude and 77 U.S. cents for the loonie.

The Canadian dollar traded higher at 0.7701 U.S. dollar, compared with Monday's closing rate of 0.7675 U.S. dollar. Endit