(Adds portfolio manager comments, updates prices)
* Index ends down 91.09 points, or 0.65 percent, at
13,826.01
* Five of the index's 10 main groups ended lower
By Fergal Smith
TORONTO, May 18 (Reuters) - Canada's main stock index
retreated on Wednesday as mining and energy stocks fell,
pressured by lower commodity prices after the U.S. Federal
Reserve signaled it could raise interest rates next month.
The index has rallied 20 percent from an almost 3-1/2-year
low in January, helped by a rebound in commodity prices. It
touched a nearly seven-month high on Tuesday, just short of the
14,000 threshold.
The market got too complacent about the prospect of a Fed
rate hike, said Steve Belisle, senior portfolio manager at
Manulife Asset Management, who expects financial stocks to
outperform some other sectors, particularly materials, if the
Fed does tighten policy.
The materials group, which includes precious and base metals
miners and fertilizer companies, tumbled 5.8 percent, including
deep losses for gold stocks. GOL/
Barrick Gold Corp ABX.TO slumped 8.2 percent to C$22.94,
while Goldcorp Inc G.TO was down 7.1 percent at C$22.15.
The energy group fell 1.7 percent as oil prices retreated
from 2016 highs, while dry, windy weather was expected to push a
wildfire in Alberta in the direction of Suncor SU.TO and
Syncrude facilities, prolonging a shutdown that has cut Canadian
oil output by a million barrels a day. O/R
Suncor Energy Inc fell 2.1 percent to C$34.40, while
pipeline operator Enbridge Inc ENB.TO declined 0.8 percent to
C$52.37.
Still Belisle expects the industry to work through its
current difficulties and would add exposure to energy stocks on
wildfire-related pullback in their prices.
Spot gold XAU= fell 1.7 percent and U.S. crude CLc1
prices declined 0.3 percent as the U.S. dollar rallied on the
potential for higher interest rates.
U.S. Federal Reserve officials said it would be appropriate
to raise interest rates in June if economic data points to
stronger second-quarter growth as well as firming inflation and
employment, according to minutes from their policy meeting last
month.
The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed down 91.09 points, or 0.65 percent, at
13,826.01. Five of the index's 10 main groups ended lower.
Financials rose 1 percent, including gains for life
insurance companies as long-term bond yields moved higher. Low
interest rates hurt insurer investment returns and the
profitability of insurance products with guaranteed returns.
Manulife Financial Corp MFC.TO rose 2.6 percent to
C$18.69, and Sun Life Financial Inc SLF.TO gained 1.7 percent
to C$44.36.
The country's main banks were also higher, including a 1.7
percent advance in the shares of Royal Bank of Canada RY.TO to
C$78.16.