TSX ends lower as financials and industrials lose ground

TORONTO, Oct 20 (Reuters) – Canada’s main stock index fell on Thursday, including declines for financials and industrials stocks, as hawkish comments from a Federal Reserve official dampened prospects for a break in central bank tightening cycles.

The Toronto Stock Exchange’s S&P/TSX Composite Index (.GSPTSE) ended down 95.11 points, or 0.5%, at 18,579.29.

U.S. stocks also closed lower and bond yields climbed as labor market data and comments from Philadelphia Federal Reserve Chairman Patrick Harker bolstered expectations that the central bank will be aggressive in rising interest rates.

“Investors are trying to figure out when the Federal Reserve is going to pause this rate hike cycle,” said Brandon Michael, senior analyst at ABC Funds in Toronto.

“The market is very sensitive to this and a possible spike in short-term rates should provide a positive catalyst towards higher stock prices.”

The Bank of Canada also raised its rates. Money markets expect the central bank to tighten by at least another 50 basis points in a policy announcement next week.

The heavily weighted Financials sector in the Toronto market fell 1.2%, while Industrials ended down 2.1%.

Rogers Communications Inc (RCIb.TO) said its wireline services were restored after a brief outage attributed to a fiber outage caused by a third party. Still, its shares ended down 0.6%.

Resource sharing was a beacon of hope.

The energy group rose 1.6% as the price of oil rose 0.5% to $85.98 a barrel.

The materials group, which includes precious and base metal miners and fertilizer companies, added 0.8% as copper prices rallied.

Reporting by Fergal Smith; Additional reporting by Shashwat Chauhan in Bengaluru; Editing by Sandra Maler

Our standards: The Thomson Reuters Trust Principles.