TSX pulls back from three-week high as financials, metal miners fall
(Recasts with market close)
TORONTO, Oct 19 (Reuters) - Canada's main stock index fell on Monday, weighed by declines for financial and metal mining shares, as investors worried that a potential Bank of Canada interest rate hike could slow the domestic economy.
The S&P/TSX Composite Index ended down 247.92 points, or 0.7%, at 35,928.63, after posting its highest closing level in more than three weeks on Friday.
* Canada's annual inflation rate rose less than expected to 3.1% in September.
* Still, investors have raised their bets on a Bank of Canada interest rate hike next week after Governor Tiff Macklem said on Saturday there was increased risk that inflation broadens and becomes more persistent.
* "If they were to hike, they're going to be slowing down an economy that's already moving at a snail's pace," said Allan Small, senior investment adviser at the Allan Small Financial Group with iA Private Wealth.
* Canada's economy has lost 41,200 jobs in the first nine months of the year compared with a gain of 211,300 in the same period of 2025.
* Heavily weighted financials fell 0.6%, while industrials were down 1.1% as railroad shares and Air Canada lost ground.
* Shares of Air Canada fell 3.2% after brokerage Jefferies cut its rating on the stock.
* Interest rate sensitive stocks were a drag, with real estate down 1.3% and utilities ending 1.4% lower.
* Canada's 10-year yield climbed 12.4 basis points to 3.953%, moving back in reach of the nearly three-year high it touched earlier this month at 4.042%.
* The materials sector, which includes metal mining shares, fell 1.1%. The price of gold was down 0.5%, pressured by a firm dollar and elevated US Treasury yields.
* Energy was the only major sector to end higher, adding 0.5%.
* US crude oil futures settled up 2.2% at $103.66 a barrel after attacks by Yemen's Iran-aligned Houthis on a Yemeni military training camp and renewed attacks on Saudi energy, airport and military facilities.
(Reporting by Fergal Smith in Toronto and Anand Gopal and Utkarsh Hathi in Bengaluru; Editing by Leroy Leo and Matthew Lewis)