TSX falls with oil as energy, high-yielding stocks decline

Mon Mar 20, 2017 5:28pm EDT
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By Fergal Smith

TORONTO (Reuters) - Canada's benchmark stock index retreated on Monday as oil prices fell and heavyweight energy and financial shares lost ground, while the prospect of higher U.S. interest rates pressured defensive sectors, such as telecoms.

That sector fell 0.9 percent, while the utilities group, another high-yielding sector, lost 0.4 percent.

"It is all the yield names ... because the Fed is raising rates and it's moving towards normalization," said Noman Ali, senior portfolio manager at Manulife Asset Management.

"They are less attractive when overall yields are going higher elsewhere."

The financials group, which has benefited from the prospect of higher yields, also lost ground, falling 0.5 percent.

"Banks' selling practices have been under a lot of scrutiny and there is risk that regulators will pay more attention to this and it might affect their overall Canadian business growth prospects," Ali said.

The energy group also declined 0.5 percent, pressured by lower oil prices. U.S. crude CLc1 prices settled 56 cents lower at $48.22 a barrel as investors grappled with growing U.S. oil output and high inventories.

Transcanada Corp (TRP.TO: Quote) has secured shippers' commitments for a pipeline associated with Malaysian state-owned oil company Petronas' pending Pacific NorthWest liquefied natural gas terminal in western Canada, the company said.   Continued...

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