TORONTO (Reuters) - Canada's main stock index lost ground on Wednesday, weighed by a sharp fall in shares of Bank of Montreal BMO.TO after it reported disappointing earnings, with investors also shying away from other major banks ahead of their quarterly results.
Bank of Montreal fell 3.3 percent to C$91.98 after reporting profits which were slightly below expectations, hit by a decline in income in the United States.
“That took the financials down” on fears that other big banks might also release less rosy earnings, said Paul Gardner, a portfolio manager at Avenue Investment Management.
The heavyweight sector, which accounts for a third of the index’s weight, ended 0.8 percent lower.
Home Capital Group Inc HCG.TO, Canada's biggest non-bank lender, lost 2.7 percent to C$8.99 after saying late on Tuesday it had drawn down an additional C$250 million from a high interest credit line.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE settled down 57.45 points, or 0.37 percent, at 15,419.49.
The energy sector fell 1 percent, which Gardner tied to supply concerns following news earlier this week that Donald Trump’s White House plans to sell half of the country’s strategic petroleum reserves.
Overall, decliners outnumbered advancers by a 1.4-to-1 ratio.
The Bank of Canada held interest rates steady as expected, saying that while economic growth was likely to moderate in the second quarter, government measures to rein in the housing market have not yet had a substantial effect.
In comments following its earnings release, a Bank of Montreal executive said Canada’s fourth-biggest lender was starting to see signs of a softening in Toronto’s housing market.
Reporting by Alastair Sharp; Editing by W Simon and Sandra Maler
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