TSX dips as resource and defensive stocks lose ground

Thu Nov 10, 2016 5:50pm EST
 
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index dipped on Thursday as lower commodity prices weighed on gold mining and energy stocks, while higher bond yields weighed on defensive sectors, such as utilities, telecoms and consumer staples.

Investors grappled with the implications of policy proposed by U.S. President-elect Donald Trump. He has promised to cut taxes and spend on infrastructure and has called for the repeal of the 2010 Dodd-Frank Financial Reform Act largely opposed by banks.

But bond yields have surged on the view that Trump's economic policies would push up inflation.

"Higher interest rates are good for banks, but they are not good for a telco or utility because they have a lot of debt outstanding and they don't offer much growth," said John Stephenson, president and chief executive at Stephenson & Company Capital Management.

The utilities sector tumbled nearly 3 percent, while telecoms fell 1.8 percent and the consumer staples sector was down 2.8 percent.

Energy stocks fell 0.7 percent, pressured by lower oil prices.

U.S. crude oil futures settled 61 cents lower at $44.66 a barrel as markets focused on oversupply concerns, as well as whether OPEC will decide later this month to cut production. [O/R]

The materials group, which includes precious and base metals miners and fertilizer companies, lost 3.8 percent.   Continued...

 
A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014.   REUTERS/Mark Blinch