March 20 (Reuters) - Canada's main stock index fell on Friday amid broad declines across sectors and was on track for a third straight weekly loss, as the escalating conflict in the Middle East showed no signs of cooling.
At 11:06 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE), was down 1.2% at 31,476.37.
Three U.S. officials told Reuters that Washington was planning to deploy thousands of additional troops to the Middle East, shortly after Axios reported that the administration was considering occupying or blockading Iran's Kharg Island.
All major sectors on the TSX were in negative territory, with materials (.GSPTTMT), leading losses, down 2.9%, as spot silver and gold tumbled. Stocks of miners Endeavor Silver (EDR.TO), and Lundin Gold (LUG.TO), declined more than 4% each.
Energy stocks (.SPTTEN), fell 1.6%, tracking a dip in oil prices, amid renewed efforts by the U.S. to ease supply disruptions. Major European nations, Japan and Canada issued a joint statement backing efforts to secure safe passage for vessels through the Strait of Hormuz.
"We're getting closer to the Strait reopening as countries like Japan and Britain step in; once flows normalize, markets should bounce significantly from the last 5-6% downturn," said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
In a week packed with central bank meetings, most policymakers, including at the Bank of Canada, kept interest rates on hold, but stressed their readiness to hike rates if inflation pressures persisted.
The war-driven jump in crude prices has fueled inflation concerns and Canada's resource-heavy index is especially sensitive to oil-price swings because the commodity is among the country's top exports.
The TSX closed at its lowest level since January 30 in the previous session, extending its total decline since the Iran war began to more than 7%.
On the data front, Canada's retail sales rose in January to C$69.65 billion ($50.81 billion), up 1.1% from the previous month, driven by stronger sales at motor vehicles and parts dealers, Statistics Canada said on Friday.
Reporting by Rashika Singh in Bengaluru; Editing by Diti Pujara
