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CANADA STOCKS-TSX tracks dip in commodities, long-dated bond yields

Published 2016-11-16, 05:48 p/m
CANADA STOCKS-TSX tracks dip in commodities, long-dated bond yields
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(Adds portfolio manager comments and details on Teck Resources and Manulife and updates prices)

* TSX ends down 22.88 points, or 0.16 percent, at 14,733.22

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

By Fergal Smith

TORONTO, Nov 16 (Reuters) - Canada's main stock index fell on Wednesday as a dip in commodity prices and long-dated bond yields weighed on resource and financials stocks, offsetting gains for the consumer staples group.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 22.88 points, or 0.16 percent, at 14,733.22.

The decline follows the Tuesday's biggest gain since September. The index has rallied 13 percent this year, but has been in a holding pattern since posting a 16-month high at 14,963.60 in October.

Cyclical stocks, such as diversified miner Teck Resources Ltd TCKb.TO , had been cheap at the beginning of the year and had already started to move up before last week's U.S. presidential election, said Ian Nakamoto, equity specialist at MacDougall, MacDougall & MacTier, a division of Raymond James.

"You layer on top a (Donald) Trump win where people thought economic growth is going to accelerate more than under (Democratic candidate) Hillary Clinton, then it has just added fuel to the fire for more investors to get into those stocks." Nakamoto said.

Teck Resources reached its highest since March 2013, closing up 1 percent at C$31.44. But the overall materials group, which includes precious and base metals miners and fertilizer companies, lost 0.4 percent, while gold XAU= dipped as the U.S. dollar .DXY climbed to a 14-year high against a basket of major currencies. GOL/

Financials pared some recent gains as yields on longer-dated bonds fell for a second straight day after having surged since last week's U.S. election.

Manulife Financial Corp MFC.TO fell 0.8 percent to C$22.87, while the overall financials group was down 0.2 percent.

Higher bond yields improve the net interest margin for banks and reduce the value of insurance companies' liabilities.

Energy fell as oil gave back some of the previous day's sharp gains. U.S. crude CLc1 prices settled 24 cents lower at $45.57 a barrel, pressured by a bigger-than-expected U.S. crude inventory build. O/R

Suncor Energy Inc SU.TO fell 0.8 percent to C$41.01, while the overall energy group was down 0.8 percent.

Four of the index's 10 main groups rose, with the consumer staples group rising 1.3 percent.

Grocery and pharmacy retailer Loblaw Cos Ltd L.TO reported a better-than-expected quarterly profit, as expenses fell and discounting attracted more shoppers. shares rose 3.3 percent to C$66.91.

The pace of Canadian manufacturing sales slowed in September, while volumes fell, suggesting slower overall economic growth heading into the final quarter of the year.

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