TSX slips as banks weigh; energy stocks bounce with oil

Thu Mar 24, 2016 4:48pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index fell to a two-week low on Thursday before paring some losses, as bank stocks retreated amid rising chatter from U.S. central bankers about hiking interest rates and as a recovery in oil prices helped energy stocks.

Another U.S. interest rate hike "may not be far off," St. Louis Federal Reserve President James Bullard said on Thursday, the latest Fed official to speak in support of rate hikes this year after the Fed stood pat last week.

"That's caused the market to pull back a bit," said Allan Small, a senior investment advisor at HollisWealth.

But while the Canadian index ended in the red, it pared much of its early losses on a recovery in the price of oil after a renewed drop in U.S. oil rigs. [O/R]

"The reversal coincided with the rig count in the U.S. that came out," Small said. "That's helped; the price of oil has come back a little bit and so have some markets."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 21.37 points, or 0.16 percent, at 13,358.11. It touched its lowest since March 7 at 13,255.47.

The energy group climbed 0.9 percent, with Canadian Natural Resources (CNQ.TO: Quote) adding 1.3 percent to C$35.22, Suncor Energy Inc (SU.TO: Quote) up 0.8 percent at C$35.86 and pipeline operator Enbridge Inc (ENB.TO: Quote) up 0.6 percent to C$49.57.

The most influential weights were bank stocks, including Royal Bank of Canada (RY.TO: Quote), which fell 1.3 percent to C$73.97, and Bank of Nova Scotia (BNS.TO: Quote), which declined 1.3 percent to C$62.42. The heavily weighted financials group fell 1 percent.   Continued...

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014.   REUTERS/Mark Blinch