(Updates prices, adds analyst comments)
By Amal S
Jan 18 (Reuters) – Canada’s main stock index fell on Tuesday, hurt by a sell-off in technology stock triggered by higher U.S. Treasury yields following the biggest jump in oil prices in seven years.
At 9:38 a.m. ET (14:38 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 197.75 points, or 0.92%, at 21,339.7, erasing previous session’s gains.
The seven-year high for oil prices pushed benchmark German Bund yields to the brink of positive territory on Tuesday, lifted U.S. Treasuries to pre-COVID levels and left global share markets trudging lower.
Toronto-listed technology stocks fell 2.2%, tracking a slump in U.S. tech-heavy Nasdaq index hurt by higher U.S. Treasury rates.
For the first time since February 2020, two-year Treasury rates, which mirror short-term rate expectations, topped the 1% mark.
“Technology stocks are still going to be under pressure today given the moves in bond yields. We need to see the bond yields start to slow their pace of growth or correct. We also need some earnings to come and that could be a turning point,” said Gregory Taylor, portfolio manager at Purpose Investments.
Higher-interest rates make future income flows from technology and other high-growth sectors less valuable to investors.
The energy sector climbed 0.9% as U.S. crude prices were up 1.1% a barrel, while Brent crude added 0.7%.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 1.1% as gold futures fell 0.2% to $1,813.5 an ounce.
On the economic front, Canadian housing starts fell 22% in December compared with the previous month as both multiple urban and single-detached urban starts decreased, data from the national housing agency showed.
The TSX posted 15 new 52-week highs and four new lows.
Across all Canadian issues, there were 40 new 52-week highs and 63 new lows, with total volume of 36.76 million shares. (Reporting by Amal S in Bengaluru; Editing by Shinjini Ganguli)
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