Canada Stocks: TSX snaps 5-day winning streak as resource shares fall

TELUS International (CDA)

06/11/2023 21:18

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      TSX ends down 0.4% at 19,743.94
    

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      Energy and materials both fall 1%
    

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      Real estate ends 1.4% lower
    

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      Consumer staples up 0.8%
    

  
 (Updates at market close)
    By Fergal Smith
       Nov 6 (Reuters) - Canada's main stock index ended lower
on Monday as resource shares fell, but optimism that long-term
borrowing costs have peaked helped to cap losses.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  closed down 80.91 points, or 0.4%, at 19,743.94, after
five straight days of gains.
    Bond yields rose on Monday but were trading far below their
peaks in October as investors bet the Federal Reserve and the
Bank of Canada (BoC) are finished raising interest rates.
    Higher interest rates reduce the value to investors of the
expected cash flows companies are expected to produce.
    "It looks like bond yields have peaked, so there should be
less pressure on valuations going forward and so we've shifted
from a market where the risk is to the downside to really a
two-way market," said Joseph Abramson, co-chief investment
officer at Northland Wealth Management.
    Investors believe that "we've seen the worst of the
valuation depression, but growth is still slowing," Abramson
said.
    Data on Friday showed both U.S. and Canadian job growth
slowed in October.
    Canadian market participants expect the BoC to start cutting
its key policy rate from a 22-year high of 5.00% in April 2024,
a month later than the previous forecast, according to a survey
released by the central bank.
    The Toronto market's energy sector fell 1%, while the
materials group, which includes precious and base metals miners
and fertilizer companies, was also down 1% as the price of gold
 XAU=  dropped.
    The real estate sector, which is particularly sensitive to
higher interest rates, lost 1.4% and healthcare was down 2%.
    The consumer staples sector was a bright spot, rising 0.8%.
    Shares of Telus International Cda  TIXT.TO  rose 6.6%,
reversing their decline on Friday.

 (Reporting by Fergal Smith in Toronto and Khushi Singh in
Bengaluru; Editing by Tasim Zahid and Paul Simao)
 ((fergal.smith@thomsonreuters.com; +1 647 480 7446))