Canada Stocks: TSX climbs to 11-day high as bond yields ease
CANADA STOCKS-TSX climbs to 11-day high as bond yields ease Updates at market close
By Avinash P and Fergal Smith
TORONTO, Oct 6 (Reuters) - Canada's main stock index rose to an 11-day high on Tuesday, led by utilities and metal mining shares, as the recent sell-off in the global bond market eased and after a deal which will create one of Canada's top power providers.
The Toronto Stock Exchange's S&P/TSX Composite Index .GSPTSE ended up 130.96 points, or 0.4%, at 35,649.51, its highest closing level since September 25.
US Treasuries rebounded after a sharp selloff in the previous session pushed long-term yields to multi-decade highs, as investors paused to assess recent moves ahead of next week's inflation data, which could offer fresh clues on the path of interest rates.
"I'd be focused more on interest rates, the 10-year yield in the United States, than I would be on energy prices, although they're related," said Matt Skipp, president at SW8 Asset Management.
"A moderating oil price seems to have the potential to lower yields, as investors worry less about inflation," Skipp added.
Lower bond yields tend to increase the attractiveness of high-dividend paying utilities stocks, with the sector rising 1.3%.
Emera EMA.TO said it would buy peer Canadian Utilities CU.TO for C$14.3 billion ($10.02 billion) in stock, strengthening its financial muscle as power companies ramp up investments to tap into booming demand.
ATCO ACOx.TO, which holds nearly 37% of the outstanding non-voting shares and all outstanding voting shares of Canadian Utilities, said it will separate into a publicly traded industrial services company.
Emera shares fell 2.9%, Canadian Utilities was down nearly 2% and ATCO ended 9.2% higher.
The materials sector .GSPTTMT, which includes metal mining shares, added 0.4% as the price of gold XAU= recovered from an earlier two-month low to increase 0.7%.
US crude oil futures CLc1 settled up 1 cent at $89.44 a barrel after earlier touching a five-week low at $86.86.
Energy .SPTTEN fell 0.6%, while industrials .GSPTTIN were down 0.7% as railroad shares lost ground.
(Reporting by by Fergal Smith in Toronto and Avinash P and Anand Gopal in Bengaluru; Editing by Leroy Leo, Jonathan Ananda and David Gregorio)
((fergal.smith@thomsonreuters.com; +1 647 480 7446))