CANADA STOCKS-TSX little changed as miners offset modest gains

(Adds portfolio manager quotes and details; updates prices)

* TSX down 8.99 points, or 0.06 percent, to 15,135

* Half of index’s 10 main industry groups end lower

By Fergal Smith

TORONTO, July 13 (Reuters) – Canada’s benchmark stock index
was near flat on Thursday for a second straight session, as
gains by Manulife Financial Corp offset losses for
interest-rate-sensitive shares a day after the Bank of Canada
raised rates.

The Toronto Stock Exchange’s S&P/TSX composite index
closed down 8.99 points, or 0.06 percent, at 15,135.

Shares of Manulife rose 1.9 percent to close at C$25.22
after The Wall Street Journal reported it is looking to list or
spin off its U.S. unit John Hancock Financial Services.

Overall, the financials group rose just 0.2 percent.

“People are waiting to see the housing picture settle before
they step in and buy the banks,” said Ian Scott, equity analyst
at Manulife Asset Management.

Investors worry that higher interest rates could weigh on
Canada’s economy just as the country’s red-hot housing market
shows some signs of slowing down.

The yield on Canada’s 10-year bond rose to its highest since
December 2014 at 1.948 percent as investors braced for
additional rate hikes from the central bank.

The International Monetary Fund said on Thursday that while
Canada’s economy has regained momentum, housing imbalances have
increased and uncertainty surrounding trade negotiations with
the United States could hinder the recovery.

Some of the country’s major bank stocks gained ground on
Thursday, but Brookfield Asset Management Inc lost 0.9
percent to C$49.74.

The reluctance of Renova Energia SA’s largest shareholder to
give up management of the debt-laden Brazilian renewable power
firm threatens to derail takeover talks with Brookfield three
people familiar with the matter said.

Half of the index’s ten main sector groups ended lower.

The utilities group dipped 0.3 percent and telecoms lost
nearly 0.5 percent.

It is difficult for telecoms to rally when rates are rising
because “they rely on debt financing,” Scott said.

The materials group, which includes precious and base metals
miners and fertilizer companies, lost 0.5 percent.

Gold edged lower as gains on Wall Street offset
wagers that policy tightening in the United States would be
glacial at best.

Losses for gold stocks were tempered by gains for fertilizer
companies. Potash Corporation of Saskatchewan Inc rose
1.9 percent to C$22.20.

The energy group eked out a 0.2 percent gain, as oil prices
rose after much stronger demand in China overshadowed a downbeat
report by the International Energy Agency.

U.S. crude oil prices settled 59 cents higher at $46.08 a
barrel.
(Additional reporting by Solarina Ho, editing by G Crosse)

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