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CANADA STOCKS-TSX hits 7-1/2 low as soft oil, rate hike outlook dents risk appetite

Published 2017-07-07, 11:03 a/m
© Reuters.  CANADA STOCKS-TSX hits 7-1/2 low as soft oil, rate hike outlook dents risk appetite
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* TSX down 162.22 points, or 1.08 percent, at 14,915.78

* Touches lowest since mid-November

* Nine of the TSX's 10 main groups were down

* Energy stocks slide 2.5 percent, materials fall 1.9 percent

TORONTO, July 7 (Reuters) - Canada's main stock index fell to a 7-1/2 month low on Friday as North American jobs data supported expectations of interest rate hikes in Canada and the United States, while higher bond yields and a slide in oil prices added to investors' retreat from riskier assets.

June employment figures for both sides of the border came in stronger than expected. Canada added 45,300 jobs, topping the 10,000 forecast, while U.S. non-farm payrolls jumped by 222,000 jobs, ahead of the 179,000 economists were expecting. ECONCA

Canada's 10-year bond yield touched its highest level since June 2015 at 1.884 percent.

At 10:26 a.m. ET (1426 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 162.22 points, or 1.08 percent, at 14,915.78. Earlier, it fell to 14,916.94, its lowest since mid-November.

Nine of the index's 10 main sectors were down.

The energy group retreated 2.5 percent, while bank stocks slipped 0.6 percent. The materials sector, which includes miners and other natural resource companies, lost 1.9 percent. The three sectors account for roughly two-third of the index's weight.

Canadian Natural Resources Ltd CNQ.TO was among the most influential movers on the downside, falling 2.0 percent to C$36.12. Encana Corp ECA.TO shares declined 4.4 percent to C$10.56.

U.S. crude oil CLc1 fell 3.6 percent to $43.89 a barrel. Prices retreated after data showed U.S. production rose last week just as exports from the Organization of the Petroleum Exporting Countries hit a 2017 high, casting renewed doubt about producers' efforts to curb excess supply. O/R

Barrick Gold Corp ABX.TO eased 1.6 percent to C$20.01, while Goldcorp Inc G.TO fell 2.8 percent to C$16.14.

The price of gold, which has shed about 6 percent since touching a seven-month peak in early June, hit a two-month low on Friday amid the increasing likelihood of another U.S. rate hike. Dollar-denominated bullion typically loses value when the greenback and interest rates rise as it does not pay interest. GOL/

Paramount Resources Ltd POU.TO tumbled 5.4 percent to C$17.73 after it said late on Thursday it would buy the Canadian subsidiary of U.S. oil and gas company Apache Corp (NYSE:APA) APA.N for C$459.5 million. Separately, Paramount also said it would buy Trilogy Energy Corp TET.TO . issues outnumbered advancing ones on the TSX by 217 to 25, for an 8.68-to-1 ratio on the downside.

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