(Adds analyst comments and details on bond yields and updates
* TSX ends down 55.32 points, or 0.37 percent, at 15,027.53
* Index touches its highest intraday in nearly 18 months
* Six of the TSX's 10 main groups end lower
By Fergal Smith
TORONTO, Dec 1 Canada's main stock index fell on
Thursday, pulling back from an earlier near 18-month high as a
jump in bond yields pressured defensive stocks, offsetting
further gains for energy shares as oil rallied.
Some of the biggest drags on the index were groups that have
benefited most from the low interest rate environment.
The telecommunications group fell 1.3 percent, with BCE Inc
down 1.5 percent at C$57.05, while consumer staples
declined 1.7 percent as Alimentation Couche Tard Inc
dropped 2.9 percent to C$60.19.
Investors may be "beginning to think that there is a limit
to how high the stock market can continue going up if bond rates
also continue to go up," said Mathieu D'Anjou, senior economist
at Desjardins Group.
Canada's 10-year yield touched its highest intraday in more
than one year at 1.712 percent as the rally in oil prices raised
If yields rise too much, investors will worry about the
stock market's valuation, D'Anjou said.
The Toronto Stock Exchange's S&P/TSX composite index
closed down 55.32 points, or 0.37 percent, at
15,027.53. Six of the index's 10 main groups ended lower.
Earlier in the day, the index touched its highest since June
3, 2015 at 15,149.54.
Investors reacted to divergent earnings reports from two
Canadian Imperial Bank of Commerce rose 2.2 percent
to C$108.34 after reporting a better-than-expected quarterly
Meanwhile, the country's No. 2 lender Toronto-Dominion Bank
fell 0.8 percent to C$63.07 after reporting earnings
that were in line with expectations.
"In light of earnings produced by some of TD's peers, we
would expect relative underperformance on its valuation today,
with TD's now noticeably lagging capital ratio likely adding to
the pressure," Barclays analyst John Aiken wrote in a note.
The heavyweight financials group was barely positive
The materials group, which includes precious and base metals
miners and fertilizer companies, lost 1.4 percent, with Teck
Resources Ltd falling 4.3 percent to C$32.56.
Gold prices hit a 10-month low as higher bond yields dented
interest in non-yielding gold as an alternative investment.
Losses for some pipeline stocks capped gains for the energy
Still, the sector rose 0.8 percent, adding to a nearly 8
percent jump on Wednesday after OPEC members and Russia agreed
to limit their oil output in a bid to prop up prices.
Tourmaline Oil Corp rose 3.6 percent to C$37.55 as
U.S. crude prices settled up $1.62 at $51.06 a barrel.
(Additional reporting by Alastair Sharp; Editing by Bernadette
Baum and Meredith Mazzilli)