TSX down 0.5%
Materials shares lead declines
Strong US jobs data pushes back rate cut hopes
Updated at 10:04 a.m. ET/ 1404 GMT
By Purvi Agarwal
June 7 (Reuters) –Canada’s main stock index fell on Friday, with materials shares leading the sectoral losses, after stronger-than-expected jobs data in the United States pushed investors toslash bets on a September rate cut by the U.S. FederalReserve.
At 10:04 a.m. ET (1404 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 115.92 points, or 0.52%, at 22,113.18.
The benchmark indexis on track to log its third consecutive weekly loss, if declines hold.
The TSX saw broad declines as investor sentiment turned downbeat after the latest employment data from across the border showedU.S. job growth in May rose far more than expected.
The materialsshares .GSPTTMT declined3.1%, dragged downby miners as spot gold prices XAU= fell more than 2% and copper prices hit a one-month low. GOL/ MET/L
Meanwhile, the consumerstaples index.GSPTTCS led the gains with a 0.4% rise, pulledup by a 5.5% increase inSaputo SAP.TO shares after the food processing company reported its fourth-quarterrevenue above estimates.
“It’s a bit of a push and a pull in Canada because the BoC is in a different direction than the U.S. Fed is. People are betting on a second cut in Canada in July, while the odds seem to have lessened for the U.S.,” said Daniel Nowlan, managing director of Equity Capital Markets Group at the National Bank of Canada.
The Bank of Canada cutinterest rates by 25 basis points this week to 4.75% for the first time in four years and said it would reduce it more if inflation continued to ease.
However,separate data showed the Canadian economy added more jobs in May than expected, alongside an uptick in the jobless rate.
“The job numbers tend to correct pretty severely on a backward basis. So people have less focus on that, and more on the BoC’s commentary,” Nowlan added.
Reporting by Purvi Agarwal in Bengaluru; Editing by Ravi Prakash Kumar and Shreya Biswas