(Adds investor quotes, details, updates prices)
* TSX ends down 0.1%
* Financial shares fall for fourth day
* Industrials climb 1.2%; healthcare ends up 1.9%
* For August, the index advances 1.5%
TORONTO, Aug 31 (Reuters) - Canada’s main stock index edged lower on Tuesday but still notched its seventh straight month of gains, supported by strong corporate earnings and historically low bond yields.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 12.03 points, or 0.1%, at 20,582.94, after touching a record high intraday level of 20,703.89.
For August, the index was up 1.5%, extending a string of gains since February. It is the longest monthly winning sequence since 2017.
“The market’s climbing the wall of worry,” said Steve Palmer, chief investment officer at AlphaNorth Asset Management. “Earnings have been great, (bond) yields are very low, so stocks I think are still reasonably attractive.”
Canada’s 5-year yield was trading at 0.84%. It has fallen more than 80 basis points since the end of 2019, before the Bank of Canada slashed interest rates and began quantitative easing to support the economy during the coronavirus crisis.
Domestic data showed that Canada’s economy unexpectedly shrank in the second quarter.
“It means that rates will stay lower for longer. Stocks are the only game in town,” Palmer said.
Shares of technology companies, which tend to benefit particularly from low rates, rose 0.2%, while industrials climbed 1.2% and the healthcare sector was up 1.9%.
In contrast, the heavyweight financial services sector fell for a fourth day, down 0.7%.
Last Wednesday, Canada’s ruling Liberal Party said that if re-elected, it would raise corporate taxes on the most profitable banks and insurers.
The U.S. rail regulator rejected a voting trust structure that would have allowed Canadian National Railway Co to proceed with its $29 billion proposed acquisition of U.S. peer Kansas City Southern.
Shares of Canadian National Railway rose 7.4%, while those of Canadian Pacific Railway Ltd, a rival suitor of the U.S. company, fell 4.6%. (Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Peter Cooney)
Our Standards: The Thomson Reuters Trust Principles.