(Adds portfolio manager quotes and details on bond yields and
* TSX closes down 269.65 points, or 1.73 percent, at
* Index close is lowest in nearly five months
* Largest drop for the index since September
* All of the TSX's 10 main groups fall
By Fergal Smith
TORONTO, May 17 Canada's main stock index
slumped on Wednesday to its lowest close in nearly five months
as global markets worried that U.S. President Donald Trump's
pro-business economic agenda could be slowed by political
The pullback in global markets came as reports of a memo by
former FBI chief James Comey suggested that Trump tried to
interfere with a federal investigation.
"If we continue to have more material political
controversies, it can dovetail into consumer and business
confidence," said Patrick Blais, senior portfolio manager at
Manulife Asset Management.
The most influential movers on the Toronto Stock Exchange's
S&P/TSX composite index were dominated by financial
companies, which make up roughly a third of the index's weight.
The group slid 1.9 percent to a five-month low.
"(U.S.) Treasuries are being bought up, yields are down and
that impacts the overall financial system." Blais said.
Canada's 10-year yield plunged 11.8 basis points to 1.455
percent. It touched the lowest intraday in nearly one month at
1.441 percent. Lower bond yields increase the value of insurance
companies' liabilities and reduce net interest margins of banks.
Royal Bank of Canada shed 1.7 percent to C$91.45,
while Toronto Dominion Bank fell 1.4 percent to C$62.26.
Insurer Manulife Financial Corp dropped 4.3 percent to
Alternative lender Home Capital Group Inc, which
reported a further decline in deposit balances, saw its shares
stumble 3.2 percent to C$8.69.
The TSX closed down 269.65 points, or 1.73 percent, at
15,273.68. It was the largest drop for the index since
All of the index's 10 main groups ended lower.
The materials sector, which includes precious and base
metals miners and fertilizer companies, fell 0.6 percent even as
gains for gold stocks helped temper declines.
Bullion reached a two-week high as the Trump scandals and
weak U.S. economic data trimmed expectations the Federal Reserve
would aggressively raise interest rates this year, pushing the
U.S. dollar to its weakest in six months. A weak greenback makes
the precious metal cheaper for non-U.S. investors.
Barrick Gold Corp rose 1.0 percent to C$23.26,
while Agnico Eagle Mines Ltd was up 0.9 percent at
C$67.39. Gold futures rose 2.0 percent to $1,259.2 an
Oil and gas stocks retreated 2.1 percent despite higher
crude oil prices. Enbridge Inc fell 2.2 percent to
Industrials declined 2.4 percent as railroad stocks lost
(Additional reporting by Solarina Ho; Editing by Paul Simao and