TORONTO (Reuters) - Canada’s benchmark stock index ended barely lower on Tuesday as financial stocks weighed, while a flight to safety helped gold miners and shares of Bombardier Inc (BBDb.TO) jumped on reports it was discussing a merger of rail operations with Siemens.
Gold prices jumped to a fresh five-month high and bond yields fell with geopolitical worries about North Korea, the Middle East and the looming French election spurring investors to seek assets seen as havens from risk. [GOL/]
“In broad strokes it’s a flight-to-safety day in both Canada and the U.S.,” said Luciano Orengo, portfolio manager at Manulife Asset Management.
The materials group, which includes precious and base metals miners and fertilizer companies, added 1.7 percent.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 3.68 points, or 0.02 percent, at 15,727.11.
Half of its 10 main sectors fell, with the heavyweight financial sector off 0.4 percent as U.S. 30-year bond yields touched three-month lows. Bank of Montreal (BMO.TO) ended down 1.1 percent at C$98.80.
“In order to see financials get going again you’re going to have to see yields move back up,” Orengo said.
Bombardier shares gained 4.5 percent to C$2.32. The Canadian plane and train maker is in talks with Germany’s Siemens (SIEGn.DE) to combine their rail operations, two people close to the matter told Reuters, a move that could strengthen their hand against Chinese state-backed market leader CRRC Corp.
Energy stocks slipped despite oil prices turning positive on reports that Saudi Arabia has told OPEC officials it wants to continue output cuts for an additional six months. [O/R]
Pipeline company Enbridge Inc declined 1.3 percent to C$56.26 and Suncor Energy declined 0.8 percent to C$41.47.
“We’re bullish energy,” Orengo said. “I don’t expect oil prices to go gangbusters from here, but you could get a rally to $58 or so before you see more concerns about more supply coming from the U.S.”
U.S. oil futures settled up at $53.40 a barrel and later extended those gains after data showed a surprise draw in U.S. crude inventories.
Editing by Meredith Mazzilli and Sandra Maler