CANADA STOCKS-TSX rises as drop in oil prices helps lower interest rates

By Reuters News

By Fergal Smith

TORONTO, Oct 20 (Reuters) - Canada's main stock index rose on Tuesday, helped by gains for financial and telecommunication stocks, as oil pulled back from its highest level since April and investors looked ahead to a more seasonally favorable period for the market.

The S&P/TSX Composite Index .GSPTSE ended up 179.33 points, or 0.5%, at 36,107.96, stopping just short of Friday's closing level, which was the highest in over three weeks.

  • "You are entering one of the best seasonal periods of the year. November and December are historically pretty rewarding months, especially given the current environment that is really oversold from a breadth perspective," said Sid Mokhtari, chief market technician for CIBC Capital Markets.

  • US crude oil futures settled 1.8% lower at $101.79 a barrel as traders weighed a meeting between the Iranian president and Pakistan's army chief, a key US-Iran mediator, against continued Houthi attacks on Saudi infrastructure.

  • The move in oil helped lower interest rates, said Mokhtari, adding, "you bring rates lower then you start buoying the utilities and telcos — things that were hit hard with the recent rise in rates."

  • The Canadian 10-year yield eased 6.8 basis points to 3.894% after rising sharply on Monday as investors raised bets on a Bank of Canada interest rate hike next week.

  • The communication services index .GSPTTTS and heavily weighted financials .SPTTFS both rose 1%, while industrials ended 0.7% higher.

  • Shares of Bombardier BBDb.TO advanced 4.4% after US President Donald Trump dropped threats against the jet maker to ban it from the US market.

  • BlackBerry BB.TO was another standout, rising 7.9% and contributing to gains for the technology sector .SPTTTK.

  • Resource shares were a drag, with energy .SPTTEN falling 0.5% and the materials group .GSPTTMT ending 0.8% lower.

  • The price of gold was down 0.4%.

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