CANADA STOCKS-TSX rises as oil stocks gain on Brent touching $110 a barrel

By Reuters News

Oct 16 (Reuters) - Canada's main stock index gained on Friday, boosted by oil stocks, while investors assessed Bank of Canada Governor Tiff Macklem's warning on persistent energy-price pressures on interest rates.

The S&P/TSX Composite Index .GSPTSE gained 0.11% to 36,176.55, touching its highest level since September 4. The index gained 1.44% in the week.

  • Energy stocks .SPTTEN rose 2.8%. Brent touched $110 a barrel for the first time since May on worries that escalating tensions in the Middle East could further tighten supplies. O/R

  • South of the border, Wall Street ended sharply lower, with CoreWeave, Broadcom and other AI-related technology stocks under renewed pressure. .N

  • In Canada, technology stocks <.SPTTTK> fell 3.5%, dragged down by a 5% fall in Shopify SHOP.TO and 7.7% decline in BlackBerry BB.TO.

  • "It's (AI trade) probably affecting the TSX to a significantly lesser extent than it's affecting some of the US indices... there's a pretty big disparity between tech and everything else at the moment," said Josh Sheluk, CIO at Verecan Capital Management.

  • "The TSX offers a pretty interesting diversifying investment relative to global stocks because it is a lot more heavily allocated and weighted towards not only energy but materials as well," Sheluk said.

  • Macklem said Canada has not raised interest rates yet but the longer elevated energy prices go on "the harder that gets".

  • The BoC is not expected to raise interest rates at its next monetary policy decision announcement on October 28, but money markets are pricing in a rate hike of 25 basis points in December, according to data compiled by LSEG.

  • Data on the day showed that Canadian home sales extended their decline in September, after a drop in August, as higher mortgage rates and expectations of a rate hike weighed on demand.

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