March 12 (Reuters) - Canada's main stock index fell on Thursday, as heavyweight financials led declines on escalating Middle East tensions, while higher crude prices lifted energy stocks and limited losses.
At 11:11 a.m. ET, the S&P/TSX composite index (.GSPTSE), was down 0.6% at 32,917.67 points. Wall Street's main indexes fell around 1%.
Financials (.SPTTFS), dropped almost 1.1%, with shares of major banks including BMO Financial (BMO.TO), and Bank of Nova Scotia (BNS.TO), down more than 1% each. Canadian non-prime consumer lender goeasy (GSY.TO), also tumbled 9.3%, extending sharp losses from the previous two sessions.
Materials (.GSPTTMT), shed 1.7%, as shares of gold miners were down on falling prices of the yellow metal, while real estate (.GSPTTRE), lost 0.2%.
Energy (.SPTTNE), stocks climbed 1.4%, helping offset some losses, as crude oil prices jumped more than 8% after Iran stepped up attacks on oil and transport facilities across the Middle East.
Meanwhile, Iran's new Supreme Leader Mojtaba Khamenei said the country will avenge the blood of its martyrs, keep the Strait of Hormuz closed and attack U.S. bases, raising prospects of a prolonged war.
Canadian Foreign Minister Anita Anand said foreign ministers from the Group of Seven will meet in Paris on March 24 and 25 to discuss diplomatic efforts to end the Iran crisis.
The conflict, which sent crude prices soaring, has hit risk assets globally as investors assess the inflationary impact of the war that could deter central banks from cutting interest rates.
"The size and duration of the shock to the price of oil remain to be seen, but higher oil prices increase growth and inflation in Canada, so it goes against rate cuts," BofA Global Research analysts said in a note.
Canada's resource-heavy stock market hit record highs earlier this year, as investors rotated into commodities and other traditional sectors, while the boom in artificial intelligence roiled tech and software stocks. However, the index has fallen more than 4% since then, as geopolitical tensions dampen risk appetite.
Reporting by Rashika Singh in Bengaluru; Editing by Diti Pujara
