Canada Stocks: TSX pares weekly decline as bond yields hold below recent peaks

Wealth Management

06/10/2023 21:40

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      TSX ends up 0.6% at 19,246.07
    

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      For the week, the index loses 1.5%
    

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      Energy rallies 1.3%; oil settles 0.6% higher
    

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      Technology also adds 1.3%
    

  
 (Updates at market close)
    By Fergal Smith
       Oct 6 (Reuters) - Canada's main stock index rose on
Friday for a third straight day as higher oil prices boosted
energy shares and investors weighed the possibility that bond
yields could be nearing their peak in the current economic
cycle.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  ended up 108.26 points, or 0.6%, at 19,246.07, after
gains on Wednesday and Thursday.
    Still, the TSX lost 1.5% for the week as investors worried
that a spike in long-term borrowing costs could derail the
global economy.
    "The higher interest rates are starting to have an
(economic) impact," said Lorne Steinberg, president, Lorne
Steinberg Wealth Management Inc.
    "Nonetheless, I think the market is comfortable with the
fact that yields have just about peaked here if not peaking."
    The Canadian 10-year yield  CA10YT=RR  was up 2 basis points
at 4.155% after stronger-than-expected domestic jobs data raised
prospects of additional Bank of Canada interest rate hikes, but
stopping short of the 16-year high it touched on Tuesday at
4.292%.
    U.S. stocks also rallied after data showed U.S. hiring rose
broadly in September but that wage growth was slowing.
    The Toronto market's energy sector rose 1.3% as the price of
oil, settled 0.6% higher at $82.79 a barrel, recouping some
recent losses.
    Technology also added 1.3% and heavily-weighted financials,
which tend to pay high dividends, ended 0.4% higher.
    "Dividend yielding stocks, like the telcos, the banks have
been the underperformers this year, and utilities. For us, it's
where we see the value and a real opportunity," Steinberg said.
    "If the economy slows down a little bit and rates come down
a tad, in 2024, those are the stocks that should be the
outperformers."

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