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CANADA STOCKS-TSX at seven-month low as riskier assets shunned on rate hike outlook

Published 2017-07-07, 05:22 p/m
CANADA STOCKS-TSX at seven-month low as riskier assets shunned on rate hike outlook
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* TSX down 50.84 points, or 0.34 percent, at 15,027.16

* Touches 14,915.78, lowest since mid-November

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

* Energy stocks fall 1.5 percent, materials slide 1.7 percent

By Solarina Ho

TORONTO, July 7 (Reuters) - Canada's main stock index fell to its weakest in more than seven months on Friday as risk appetite waned on the back of North American jobs data that supported rate-hike expectations in Canada and the United States, while higher bond yields and a slide in oil prices further dented sentiment.

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. nonfarm payrolls jumped by 222,000 jobs, ahead of the 179,000 economists were expecting. ECONCA

Canada's 10-year bond CA10YT=RR yield touched its highest since June 2015 at 1.894 percent.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE fell 50.84 points, or 0.34 percent, to 15,027.16. It touched 14,915.78 during intraday trading, its lowest since mid-November.

Of the index's 10 main groups, six declined.

"Unfortunately the TSX, which is very heavily resourced based, stay hostage because of our constituent base," said Sid Mokhtari, market technician and director of institutional equity research at CIBC World Markets.

The energy group retreated 1.5 percent, while materials, which includes miners and other natural resource companies, lost 1.7 percent. The two sectors account for roughly a third of the index's weight. Financials, which account for another third, were nearly flat.

Canadian Natural Resources Ltd CNQ.TO was among the most influential movers on the downside, falling 1.4 percent to C$36.33. Encana Corp ECA.TO declined 2.2 percent to C$10.80.

U.S. crude CLc1 futures fell 2.8 percent to settle at $44.23 a barrel. Prices fell after data showed U.S. production rose last week just as the Organization of the Petroleum Exporting Countries' exports hit a 2017 high, casting renewed doubt over the producers' efforts to curb persistent excess supply. O/R

Mokhtari said the energy sector had been demolished in recent months and that it was nearing a bottom.

"It's too early to have a table-pounding 'buy' into the sector, but I do get a sense there's enough bearish sentiment for the complex that makes it attractive just from a contrarian perspective," he said.

Barrick Gold Corp ABX.TO stock fell 2.6 percent to C$19.81, while Goldcorp Inc G.TO was down 2.7 percent to C$16.15.

Gold XAU= prices hit a four-month low amid an increasing likelihood of another U.S. interest rate hike. Dollar-denominated bullion typically loses value when the greenback and interest rates rise as it does not pay interest.

Declining issues outnumbered advancing ones on the TSX by 159 to 87, for a 1.83-to-1 ratio on the downside.

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