The Canadian dollar got a boost Wednesday from the Bank of Canada’s decision to raise its key interest rate, while the Toronto stock market closed in negative territory with weakness across most of its major sectors.

The loonie gained 0.97 of a cent to 96.39 cents US after the central bank raised its overnight rate by a quarter point to 1% – the highest level since January 2009.

Even as it tightened lending conditions, the central bank acknowledged that the country’s economic growth will be more gradual than previously thought due to ongoing U.S. weakness.

“The bank is still fairly confident that Canada’s economy is holding up quite well – at least the domestic side of the economy,” said Sal Guatieri, senior economist at BMO Capital Markets.

But “the U.S. is indeed slowing and is at risk of slowing even further and that, of course, presents a headwind to Canada’s economy that the Bank of Canada needs to monitor very closely,” he added.

The Toronto stock market moved lower as broad-based weakness offset earlier optimism generated by a successful bond auction in Portugal.

The S&P/TSX composite index fell 59.69 points to 12,042.29 at the end of an uninspired trading day that saw investors searching for direction.

The gold sector was the biggest loser, falling 1.7%. The December gold contract on the New York Mercantile Exchange slipped $1.80 to US$1,257.50 an ounce a day after closing at an all-time high.

Shares in Eldorado Gold Corp. (TSX:ELD) fell 16 cents to $20.02 after the company announced it will withdraw from a bidding contest with Goldcorp (TSX:G) for Andean Resources Ltd. (TSX:AND).

Shares in Goldcorp lost 66 cents to $43.66, while Andean’s stock fell 22 cents or 3.4% to $6.17.

The telecom sector was another loser, falling 1.1% after new wireless player Mobilicity filed a complaint with the Competition Bureau against Rogers’ unlimited talk and text service Chatr, saying that it’s too similar to its own unlimited offering. Shares in Rogers Communications Inc. (TSX:RCI.B) lost 30 cents to $37.30.

The October crude contract added 58 cents to US$74.67 a barrel. The Toronto energy sector was down 0.6%.

Shares in Suncor Energy Inc. (TSX:SU) fell 26 cents to $33.21 after the energy company said it has reached a deal to sell a number of its U.K. offshore assets for about $390 million to an affiliate of British company Dana Petroleum PLC.

The metals and mining sector advanced 0.5%, helped by higher copper prices.

The December copper contract gained three cents to US$3.50 per pound. Shares in Teck Resources Ltd. (TSX:TCK.B) gained 51 cents to $39.25.

The TSX Venture Exchange fell 6.9 points to 1,588.06.

Financials crept slightly higher, up 0.1%, buoyed by positive news that investors are becoming more interested in European government debt.

That was illustrated by strong demand for Portuguese government bonds Wednesday, just a day after reports suggested Europe’s banks may have more potentially risky government debt on their books than was previously thought.

“It’s a very news-driven market,” said Luciano Orengo, a portfolio manager at MFC Global Investment Management.

“People started to think that these concerns about European banks were surfacing again. Fast-forward to today and Portugal’s auction for the sale of its bonds was 2.6 times oversubscribed, and that compares to about 1.6 times in March.”

Shares in Bank of Montreal (TSX:BMO) gained 98 cents to $60.13.

Wall Street moderated its earlier gains after the U.S. Federal Reserve found that more regions of the country reported slower growth as the U.S. economy lost momentum in the late summer.

Of the 12 regions tracked by the Fed, economic activity was mixed or slowed in five. Activity elsewhere was described as modest or pointed to positive developments.

The Dow Jones industrial average added 46.32 points to 10,387.01, while the Nasdaq composite index was up 19.98 points to 2,228.87. The S&P 500 gained 7.03 points to 1,098.87.

In corporate news, oil producer Bronco Energy Ltd. (TSX:BCF) announced it has agreed to a takeover by Legacy Oil + Gas Inc. (TSX:LEG) in a share-swap agreement. Shares in Bronco jumped 2.5 cents or 14.7% to 19.5 cents, while shares in Legacy added six cents to $11.05.

Shares in junior miner Anatolia Minerals Development Ltd. (TSX:ANO) fell 51 cents or 6.5% to $7.30 after the company said it has agreed to merge with Australia-based Avoca Resources Ltd. in a share-swap arrangement.

Publisher and commercial printer Transcontinental (TSX:TCL.A) reported a third-quarter profit of $30.6 million versus $25.5 million in the same period a year ago. Revenues were $500.3 million, down about 1%. Shares in the company fell two cents to $13.15.

Grain handler and farm supplier Viterra Inc. (TSX:VT) said its third-quarter net income fell to $63.5 million, down 47% from the same time last year. Shares in the company added nine cents to $8.59.

And shares in Iamgold Corp. (TSX:IMG) lost $1.06 or 5.3% to $19.07 after the gold producer said it has appointed longtime energy industry player Stephen Letwin as president and CEO.