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

(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
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.

Industrials fell 1.2 percent, with Canadian National Railway
Co down 2 percent at C$105.45 and Bombardier Inc
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.

Alimentation Couche Tard Inc 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.

Heavyweight energy and gold mining stocks also weighed, with
pipeline operator Enbridge Inc down 1.3 percent and
gold miner Agnico Eagle Mines Ltd off 3.8 percent at

Overall, there were nine decliners for every two advancers.
(Editing by Nick Zieminski and Matthew Lewis)