TORONTO: Canada’s main stock index edged lower on Friday, weighed by declines for energy and industrial shares, as long-term borrowing costs increased, but the index still posted a weekly gain.
The Toronto Stock Exchange’s S&P/TSX Composite Index ended down 69.58 points, or 0.2 percent, at 35,804.86. For the week, the index was up 0.3 percent, after four straight weekly declines.
“Markets remain on eggshells thanks to rising oil prices and bond yields and we are not out of the woods when it comes to the volatility that typically arises during September and October,” said Rick Gardner, chief investment officer at RGA Investments.
US Treasury yields rose as investors evaluated the outlook for interest rates following the Federal Reserve’s first rate hike in three years on Wednesday. Investors worry that elevated long-term rates could reduce stock market valuations.
US crude oil futures gave back some recent gains, settling 1.6 percent lower at USD100.30 a barrel, as markets assessed Saudi supply alongside concerns about a widening Middle East conflict.
Earlier this week, Prime Minister Mark Carney announced that Canada will let businesses immediately write off the cost of most new capital investments for tax purposes.
“Despite the lofty investment goals, markets were grounded by the mundane reality that the Bank of Canada may also have its tightening hand forced by persistently strong energy prices - although trade friction and uncertainty offer a strong counterpoint for now,” Douglas Porter, chief economist at BMO Capital Markets, said in note.
Investors see a 65 percent chance the Bank of Canada would raise interest rates next month.
The pullback in oil prices weighed on the energy sector , which ended 0.7 percent lower.
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