The Toronto stock market closed little changed Tuesday amid hopes that the Chinese government and U.S. central bank will move to launch stimulus measures to boost their slowing economies.
The S&P/TSX composite index edged up 5.02 points to 12,220.45 after China's Premier Wen Jiabao promised more tax cuts and measures to boost consumer spending during a speech to the World Economic Forum. The TSX Venture Exchange rose 3.89 points to 1,274.6.
The Canadian dollar closed up 0.45 of a cent to a 13-month high of US102.75¢ as the greenback weakened ahead of the Federal Reserve's two-day meeting on interest rates. The U.S. central bank could announce another round of quantitative easing, which would see the Fed print more money to buy up bonds to keep interest rates low and encourage lending.
U.S. markets were higher as the Dow Jones industrials gained 69.07 points to 13,323.36.
The Nasdaq composite index was 0.51 of a point higher to 3,104.53. Shares in Apple Inc. were down slightly a day before the tech icon was expected to announce a new iPhone. The company's stock declined $2.15 to US$660.59.
The S&P 500 index was ahead 4.48 points to 1,433.56.
There were increased expectations that
the Fed would provide another jolt for the economy after jobs data released Friday failed to meet modest expectations of 125,000 new jobs. Instead, the U.S. economy cranked out 97,000 jobs and employment numbers for June and July were revised downward.
However, it is uncertain whether the Fed will act now, as it may not want to become a key point of debate in the upcoming U.S. presidential election. "They can't be seen to be doing too much in the way of massive stimulus," said Gavin Graham, president of Graham Investment Strategy.
Meanwhile, Wen's commitment to stimulative measures came a day after data showed that China's economic slump is worsening.
China's imports declined 2.6% from a year earlier during August, below analysts' expectations of growth in low single digits. That came on top of August's decline in factory output to a three-year low and other signs growth is still decelerating despite repeated stimulus efforts.
A slowing Chinese economy is particularly bad news for commodity prices and stocks on the resource-intensive Toronto stock market.
The TSX felt late session pressure from the financial sector, which finished the day down 0.33%. TD Bank shed 67¢ to $81.57 while Royal Bank gave up 63¢ to $55.81.
