S&P/TSX Composite Index slips after record high as financials lead declines
Canada's main stock index pulled back near 35,500 after a record close as higher bond yields hurt banks, while stronger gold, oil and upbeat earnings from firms including Cenovus supported miners and energy shares.
The S&P/TSX Composite Index fell more than 0.5% on Wednesday to trade near 35,500 after a record close in the previous session, with financials leading declines as investors digested the Federal Reserve's decision to hold rates steady despite three dissents favoring a hike. Higher bond yields pressured major Canadian banks including RBC, TD Bank, BMO, CIBC and Scotiabank, each down about 2%. Mining and energy shares provided some support as gold and crude prices strengthened; Agnico Eagle, WPM and Franco-Nevada rose, while Canadian Natural and Cenovus gained nearly 4%. A newer market update said TSX futures rose on Thursday as investors focused on stronger-than-expected earnings from Vermilion Energy, Kinross Gold, Cenovus, Alamos Gold, Loblaw and TransCanada, while Ivanhoe Mines and Tourmaline Oil missed estimates, and as Bank of Canada July 15 meeting minutes showed policymakers were divided over the recovery outlook.
- bond yields: The return investors earn on bonds, which can rise when bond prices fall and often affect borrowing costs and stock valuations.
- FOMC: The Federal Open Market Committee, the Federal Reserve body that sets U.S. monetary policy.
- Bank of Canada: Canada's central bank.