Canada stocks-Canada's TSX declines as rising yields dent sentiment; energy stocks gain
EWC•TSX falls near four-week lows as yields rise
Canada's benchmark index edged lower on Tuesday, trading near four-week lows, as rising bond yields and declines in precious metal prices dampened risk appetite, while an uptick in oil prices kept broader declines in check.
The S&P/TSX Composite Index .GSPTSE fell 0.8% to 35,971.23 at 09:56 a.m. ET (1356 GMT).
Miners slide while defensive sectors and energy gain
- Global bond yields climbed to multi-month highs as renewed hostilities in the Middle East lifted oil prices, prompting markets to reassess expectations of rate hikes by central banks.
- Yields on 10-year U.S. Treasury US10YT=RR bonds and the Canadian 10-year note CA10YT=RR rose to 4.776% and 3.758%, respectively, marking the highest levels for both since early 2025.
- The surge in yields weighed on metal prices, with gold and silver both down more than 2% each. The materials sector .GSPTTMT that houses Canadian miners lost 2.8%.
- Barrick Mining ABX.TO lost 2.5%, NovaGold Resources NG.TO was down 4.5%, while Equinox Gold EQX.TO shed 4.2%.
- Investors flocked to sectors considered traditionally defensive, with healthcare .GSPTTHC and consumer staples .GSPTTCS adding 0.8% and 1.2%, respectively.
- Rising oil prices lifted energy stocks .SPTTEN 1.5%, giving the index a boost.
- "Bond yields rising is not a good thing, you couple that with higher oil prices — good for energy companies — but not good for inflation... Today is glass half empty versus half full," said Allan Small, senior investment advisor for Allan Small Financial Group with iA Private Wealth.
