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CANADA STOCKS-TSX falls in broad retreat as rate hike talk bites

Published 2017-06-29, 05:08 p/m
© Reuters.  CANADA STOCKS-TSX falls in broad retreat as rate hike talk bites
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(Adds comment by portfolio manager, updates prices to close)

* TSX ends down 142.16 points, or 0.93 percent, at 15,213.42

* All of the TSX's 10 main groups fall

By Alastair Sharp

TORONTO, June 29 (Reuters) - Canada's main stock index fell on Thursday in a broad retreat as investors turned cautious in response to a more hawkish tone from the Bank of Canada and as they position their portfolios for the end of the quarter.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 142.16 points, or 0.93 percent, at 15,213.42. All 10 of its main sectors ended in the red.

The utilities and telecom sectors, where stocks typically pay chunky dividends and are sensitive to changing expectations for interest rates, both fell at least 1 percent.

Bank of Canada Governor Stephen Poloz earlier this week said that rate cuts in 2015 had done their job, part of a dramatic shift to a more hawkish tone from the central bank that startled analysts who had not expected a hike until 2018.

The market is now fully pricing in a hike by October.

"It's a combination of a shift in stance from the Bank of Canada which is maybe accelerating fund flows heading into quarter-end," said Bryden Teich, portfolio manager at Avenue Investment Management. "There's no fundamental reason why something that was up yesterday should be down today."

The index is expected to edge up to set a new high by the middle of 2018, a Reuters poll found on Thursday, boosted by moderate economic growth offsetting depressed oil prices and worries about the country's housing market. fell 1.2 percent, with Canadian National Railway Co CNR.TO down 2 percent at C$105.45 and Bombardier Inc BBDb.TO off 1.2 percent at C$2.42 after the company confirmed its transportation unit plans to cut up to 2,200 jobs in Germany as part of a sweeping savings plan. Couche Tard Inc ATDb.TO declined 2.5 percent to C$62.75. The convenience store operator's shares had jumped earlier in the week on news it had won U.S. antitrust approval to buy rival CST Brands Inc. energy and gold mining stocks also weighed, with pipeline operator Enbridge Inc ENB.TO down 1.3 percent and gold miner Agnico Eagle Mines Ltd AEM.TO off 3.8 percent at C$58.24.

Overall, there were nine decliners for every two advancers.

(Editing by Nick Zieminski and Matthew Lewis)

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