TSX little changed as miners offset modest gains

TORONTO (Reuters) - Canada’s benchmark stock index was near flat on Thursday for a second straight session, as gains by Manulife Financial Corp offset losses for interest-rate-sensitive shares a day after the Bank of Canada raised rates.

Businessmen pass the Toronto Stock Exchange sing in Toronto, Ontario, Canada July 6, 2017. REUTERS/Chris Helgren

The Toronto Stock Exchange’s S&P/TSX composite index closed down 8.99 points, or 0.06 percent, at 15,135.

Shares of Manulife rose 1.9 percent to close at C$25.22 after The Wall Street Journal reported it is looking to list or spin off its U.S. unit John Hancock Financial Services.

Overall, the financials group rose just 0.2 percent.

“People are waiting to see the housing picture settle before they step in and buy the banks,” said Ian Scott, equity analyst at Manulife Asset Management.

Investors worry that higher interest rates could weigh on Canada’s economy just as the country’s red-hot housing market shows some signs of slowing down.

The yield on Canada’s 10-year bond rose to its highest since December 2014 at 1.948 percent as investors braced for additional rate hikes from the central bank.

The International Monetary Fund said on Thursday that while Canada’s economy has regained momentum, housing imbalances have increased and uncertainty surrounding trade negotiations with the United States could hinder the recovery.

Some of the country’s major bank stocks gained ground on Thursday, but Brookfield Asset Management Inc lost 0.9 percent to C$49.74.

The reluctance of Renova Energia SA’s largest shareholder to give up management of the debt-laden Brazilian renewable power firm threatens to derail takeover talks with Brookfield three people familiar with the matter said.

Half of the index’s ten main sector groups ended lower.

The utilities group dipped 0.3 percent and telecoms lost nearly 0.5 percent.

It is difficult for telecoms to rally when rates are rising because “they rely on debt financing,” Scott said.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.5 percent.

Gold edged lower as gains on Wall Street offset wagers that policy tightening in the United States would be glacial at best.

Losses for gold stocks were tempered by gains for fertilizer companies. Potash Corporation of Saskatchewan Inc rose 1.9 percent to C$22.20.

The energy group eked out a 0.2 percent gain, as oil prices rose after much stronger demand in China overshadowed a downbeat report by the International Energy Agency.

U.S. crude oil prices settled 59 cents higher at $46.08 a barrel.

Additional reporting by Solarina Ho, editing by G Crosse