CANADA STOCKS-TSX rises as resource stocks gain; markets weigh BoC outlook

By Reuters News

Oct 16 (Reuters) - Canada's main stock index climbed to a more-than-one-month high on Friday, led by gains in materials and energy shares, 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 rose 0.8% to 36,406.48 points at 10:30 a.m. ET, its highest level since September 4. It was on track for a second consecutive weekly gain.

  • The materials sector .GSPTTMT advanced 1% after prices of gold and silver rose GOL/

  • Brent crude fell 0.4% but remained above $100 a barrel, keeping attention on the energy sector .SPTTEN, which rose 1.2% on Friday and is up more than 60% so far this year O/R

  • Strength in commodity-linked shares helped lift the resource-heavy Canadian benchmark after a sharp, AI-driven technology selloff rattled global markets earlier this week, with a more limited impact on the TSX MKTS/GLOB

  • "Materials, gold in particular, and copper, we're pretty bullish on those materials sectors. That could help TSX go higher," said Michael Dehal, a senior portfolio manager at Dehal Investment Partners at Raymond James

  • Dehal said the index would be particularly sensitive to developments in the Middle East and movements in bond yields

  • 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

  • The consumer discretionary sector .GSPTTCD climbed 0.8%, led by Aritzia ATZ.TO rising 1.2% after Scotiabank resumed coverage with a 'sector outperform' rating

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