* TSX ends down 1% at 33,609.97
* Posts its lowest closing level since February 19
* Materials group drops 3.9% as gold falls
* Canadian Natural Resources rises 2.9% after earnings beat (Updates at market close)
March 5 (Reuters) – Canada’s main stock index fell to a two-week low on Thursday, with high-flying metal mining shares among the biggest decliners as investors grew cautious on the widening Middle East conflict.
The S&P/TSX Composite Index ended down 332.89 points, or 1%, at 33,609.97, posting its lowest closing level since February 19.
U.S. stocks also declined as the conflict entered its sixth day, pushing oil prices sharply higher and spurring worries about inflation and whether the Federal Reserve will cut interest rates.
“The TSX is proving that it’s not immune to the broad-based de-risking that’s taking down equity markets globally today and that’s despite of its heavy weight to mining – gold in particular – and energy,” said Brian Madden, chief investment officer at First Avenue Investment Counsel Inc.
The materials group, which includes metal mining shares, dropped 3.9%, as rising U.S. Treasury yields and a firmer U.S. dollar weighed on the price of gold.
The move added to recent volatility for the sector, which accounts for 20% of the TSX’s weighting and has advanced 18.4% since the start of the year.
“The weak-handed Johnny-come-lately on the trade in the gold miners is de-risking by selling things that have been recent winners,” Madden said, referring to the expression about a person that has come late to a trend.
Heavily weighted financials lost 1% and industrials ended 0.7% lower.
Two of the 10 major sectors ended higher, including energy . It added 0.9% as the price of oil settled 8.5% higher at $81.01 a barrel.
Canadian Natural Resources posted a better-than-expected profit in the fourth quarter, helping its shares add 2.9%.
Technology was up 2.9%, with Kinaxis Inc gaining 3.5% after the enterprise software firm beat quarterly revenue estimates. (Reporting by Fergal Smith and Utkarsh Tushar Hathi; Editing by Shreya Biswas, Jonathan Ananda and Deepa Babington)
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