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CANADA STOCKS-TSX pulls back from record high as energy tumbles

Published 2017-02-22, 05:42 p/m
© Reuters.  CANADA STOCKS-TSX pulls back from record high as energy tumbles
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(Adds details throughout on stocks and sectors, updates prices)

* TSX closes down 92.15 points, or 0.58 percent, at 15,830.22

* Six of the TSX's 10 main groups end lower

By Fergal Smith

TORONTO, Feb 22 (Reuters) - Canada's main stock index fell the most in three weeks on Wednesday, pulling back from a record high set the day before as lower commodity prices pressured shares of energy and materials companies.

The energy group tumbled nearly 3 percent and the materials group, which includes precious and base metals miners and fertilizer companies, lost 1.2 percent as crude oil and metal prices fell.

Investor expectations for Federal Reserve interest rate hikes have pressured commodities priced in U.S. dollars, said Youssef Zohny, portfolio manager at StennerZohny Investment Partners of Richardson GMP.

"We probably expect that trend to continue ... That may create a bit of a headwind for the energy and materials sectors," he added.

Many Fed policymakers said it may be appropriate to raise U.S. rates again "fairly soon" should jobs and inflation data come in line with expectations, according to the minutes of the central bank's last policy meeting released on Wednesday.

Gold futures GCc1 fell 0.4 percent to $1,232 an ounce and copper prices CMCU3 declined 0.3 percent to $6,039.85 a tonne. GOL/ MET/L

U.S. crude CLc1 prices settled 74 cents lower at $53.59 a barrel on expectations of another surge in U.S. inventories. O/R

Canadian Natural Resources Ltd CNQ.TO fell 4.2 percent to C$38.16, while the overall energy group has slumped 8.7 percent year to date as investors weigh prospects for a proposed U.S. border adjustment tax which could hamper the competitiveness of Canada's oil exports.

Six of the index's 10 main groups were lower, with financials dipping 0.1 percent as investors braced for upcoming earnings reports from the sector.

"It would be potentially hard for investors to be surprised on the upside given current valuations are pricing in significant good news already," Zohny said.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 92.15 points, or 0.58 percent, at 15,830.22, its biggest drop since Jan. 30.

Still, the index is up 3.5 percent since the start of the year after notching a 17.5 percent gain in 2016.

Waste Connections Inc WCN.TO advanced 3.1 percent to C$114.25. It estimated first-quarter revenue to be about $1.075 billion. retail sales unexpectedly fell 0.5 percent in December as consumers bought fewer new cars and spent less during the holiday shopping season, putting a damper on expectations for economic growth at the year's end.

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