Canada Stocks: TSX hits nearly two-month low as gold slides, bond yields climb
CANADA STOCKS-TSX hits nearly two-month low as gold slides, bond yields climb Updates at market close
By Darshan Kumar R and Fergal Smith
TORONTO, Sept 28 (Reuters) - Canada's main stock index fell to a nearly two-month low on Monday as the global bond market sell-off continued and after a steep decline in the price of gold weighed on mining stocks.
The Toronto Stock Exchange's S&P/TSX Composite Index .GSPTSE ended down 311.03 points, or 0.9%, at 35,489.86, its lowest closing level since July 31.
"Canadian equities are caught between the benefit of higher oil prices and the drag from rising bond yields, while elevated rates remain a risk to the country's housing market and leave bank stocks looking overbought," said Matt Skipp, president at SW8 Asset Management.
US Treasury yields rose and Canada's 10-year yield CA10YT=RR touched its highest level since October 2023 at 4.017%, as elevated oil prices fanned fears that inflation would stay higher for longer and prompt more Federal Reserve interest rate increases.
Canadian GDP data for July, due on Tuesday, could offer clues on the state of the domestic economy. Economists expect a flat reading compared to June.
The materials sector .GSPTTMT, which includes metal mining stocks, fell 3.7% as gold XAU= dropped 3.9% to a nearly eight-week low.
Heavily weighted financials .SPTTFS were also a drag, falling 0.7%.
U.S. crude oil futures CLc1 settled up 0.2% at $92.60 a barrel, after easing off session highs on expectations that Qatari mediators would hold talks with the US and Iran to try to find a possible peace deal.
Energy .SPTTEN added 0.3%, while consumer discretionary was up 0.8% as Gildan Activewear GIL.TO clawed back some recent declines.
Donald Trump Jr.-backed Unusual Machines UMAC.A and an unnamed US asset management company have invested $10 million in Canadian drone services firm Draganfly DPRO.CD, boosting the company's shares.
(Reporting by Fergal Smith in Toronto and Darshan Kumar and Ragini Mathur in Bengaluru; Editing by Diti Pujara and Nick Zieminski)
((fergal.smith@thomsonreuters.com; +1 647 480 7446))