Off The Wire
TSX hits two-month low as major bank stocks weigh
May 25 (Reuters) - Canadian shares hit a near-two month low on Thursday, including declines for the energy sector, as well as for the shares of Royal Bank of Canada (RY.TO) and Toronto-Dominion Bank (TD.TO) after the two major lenders reported corporate earnings.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended down 153.61 points, or 0.8%, at 19,774.08, its lowest closing level since March 28.
RBC, the TSX company with the highest market capitalization, reported a decline in quarterly earnings. Its shares slid 1.8%, while TD shares were down 4.2% after the lender said it would not be able to meet its earnings growth target.
In contrast, Canadian Imperial Bank of Commerce (CM.TO) shares ended up 2.1% after the company beat expectations for earnings per share.
"The broader themes that have emerged (for banks) are higher provisions for credit losses," said Angelo Kourkafas, investment strategist at Edward Jones Investments.
"No doubt there are some profit pressures with higher expenses and slowing loan growth but at the same time fundamentals remain fairly solid."
Canada's economy is expected to slow this year as higher borrowing costs pressure the finances of heavily-indebted households.
The energy sector (.SPTTEN) shed 2.2% as Russia played down the prospect of further OPEC+ production cuts at its meeting next week, pressuring oil.
U.S. crude prices settled 3.4% lower at $71.83 a barrel, while a drop in the price of gold contributed to 1.7% decline for the materials sector.
Gold weakened after U.S. economic data supported the view that the Federal Reserve will raise interest rates further, Edward Moya, a senior market analyst at OANDA in New York, said in a note.
Bucking the trend, the tech sector (.SPTTTK) added 0.4%, tracking gains for its U.S. peers.