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Auto parts maker Magna tanks to the bottom of TSX
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Employment data sharply exceeds expectations
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S&P/TSX composite index headed for weekly declines
By Shristi Achar A Feb 10 (Reuters) - Canada's main stock index fell on Friday as strong domestic jobs data fueled worries that the Bank of Canada (BoC) could reconsider its pause to increasing interest rates, while gains in energy stocks checked declines on the resource-heavy index. At 9:54 a.m. ET (1454 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 74.3 points, or 0.36%, at 20,523.45. The index was headed for its first weekly decline in six. Canada's economy added a net 150,000 jobs in January, the fifth consecutive monthly gain, far ahead of analysts' forecasts of 15,000 jobs. Additionally, unemployment rate remained unchanged at 5.0%, signaling that the labor market is still tight and might prompt further rate hikes. "We are still in an inflationary environment and perhaps the market is responding to that it (interest rate hikes) is still on the table," said Kevin Headland, co-chief investment strategist at Manulife Investment Management.
Minutes from the BoC's January policy meet released earlier this week showed that while the central bank was inclined to pause interest rate hikes, labor market tightness had prompted it to increase the rates by 25 basis points. Rate-sensitive technology stocks dropped 1.5%. A bright spot was the energy sector , up 1.5%, as oil prices jumped on Russia's plan to reduce oil production next month. In earnings-driven moves, Magna International Inc slumped 12.9% after the auto parts maker reported a nearly 80% slump in its quarterly profit, as it struggled with higher engineering costs in its electrification and self-driving businesses. The stock dragged down the consumer discretionary sector by 3.5%. Enbridge Inc posted a quarterly loss, compared with a year-ago profit, as it took a C$2.5 billion ($1.86 billion) hit from higher cost of capital related to its gas transmission reporting unit. Shares of the pipeline operator, however, rose 0.5%. (Reporting by Shristi Achar A in Bengaluru; Editing by Maju Samuel)
