TSX recoups some monthly losses as energy and financials gain

By Fergal Smith

(Reuters) - Canada's main stock index rallied on Monday, with the heavily weighted energy and financials sectors contributing as the market overcame an earlier bout of risk aversion to claw back some of its monthly decline.

Toronto Stock Exchange's S&P/TSX composite index ended up 158.35 points, or 0.6%, at 24,917.50. For the month, the index was down 1.9%, its second straight month of declines.

Both the U.S. and Canadian markets were showing signs of being "oversold," said Sid Mokhtari, chief market technician at CIBC Capital Markets, adding that "maybe some people are taking an element of risk ahead of the tariff calls from the (U.S.) administration."

U.S. President Donald Trump said on Sunday that expected tariffs he is set to announce on Wednesday will include all nations, not just a smaller group of 10 to 15 countries with the biggest trade imbalances.

"In Canada, we are seeing better performance coming from financials and energy," with the former helped by seasonal factors and the latter supported by a downtrend for Canadian bond yields, Mokhtari said.

Combined, financials and energy account for 50% of the TSX's weighting.

Financials added 0.8% as the Canadian 10-year yield eased 5.3 basis points to 2.964%.

Energy was up 1.2%. The price of oil settled 3.1% higher at $71.48 a barrel on worries that supplies could decline if Trump follows through on threats to impose more tariffs on Russia and to possibly attack Iran.

The materials sector, which includes fertilizer companies and metal mining shares, added 0.5% as the price of gold climbed to a fresh record high.

Industrials rose 1.1% and consumer staples ended 1.9% higher. Technology was the only one of 10 major sectors to end lower, falling 0.2%.

(Reporting by Fergal Smith in Toronto and Ragini Mathur and Sanchayaita Roy in Bengaluru; Editing by Marguerita Choy)