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

* 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.

Canada’s 10-year bond yield touched its highest
since June 2015 at 1.894 percent.

The Toronto Stock Exchange’s S&P/TSX composite index
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 was among the most
influential movers on the downside, falling 1.4 percent to
C$36.33. Encana Corp declined 2.2 percent to C$10.80.

U.S. crude 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.

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 stock fell 2.6 percent to
C$19.81, while Goldcorp Inc was down 2.7 percent to
C$16.15.

Gold 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.
(Reporting by Solarina Ho; Editing by James Dalgleish)


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