CANADA STOCKS-TSX rises as lower bond yields offset tech, energy weakness
By Utkarsh Hathi
Oct 15 (Reuters) - Canada's main stock index rose on Thursday, as lower bond yields boosted risk appetite, offsetting weakness in energy shares caused by falling oil prices and a global selloff in AI-related technology stocks.
The S&P/TSX Composite Index .GSPTSE was up 0.52% at 35,770 points by 10:41 a.m. ET, rebounding after sharp declines in the previous session.
Canada's benchmark 10-year bond yield slipped about 8 basis points to 3.795%, driving broad sectoral gains
Materials sector .GSPTTMT, including metal miners, gained 1.4% as precious metal prices rebounded on a softer dollar
Chip stocks globally extended losses as concerns about increased borrowing costs unsettled investors, dragging Wall Street's Nasdaq down 0.7%
Canadian tech equities .SPTTTK declined 0.7%, with e-commerce platform Shopify SHOP.TO slipping 1.4% and electronics equipment firm Celestica CLS.TO down 7.7%
"The sector has continued to be under pressure that started at the beginning of the year, except (for) the relief rally in the spring and summer," said Shiraz Ahmed, CEO of Sartorial Wealth
"The moat around their (software) business is not quite as strong, now that AI and the ability to effectively recreate software has become very commoditized"
Energy sector .SPTTEN slipped 0.5% as oil prices eased 0.7% after a US official on Wednesday signaled potential US steps to ease restriction on Russia's "shadow fleet" tankers
Canadian factory sales grew 1.5% in August from July on higher sales of primary metals, data showed on Thursday
Still, economists remain cautious about recovery in manufacturing considering limited sectoral gains
"This reinforces our view that the Bank of Canada will deliver only two of the roughly four rate hikes currently priced in by markets, with tightening serving more as a risk-management exercise against upside inflation risks," said Thomas Ryan, senior North America economist, Capital Economics