By Fergal Smith
TORONTO (Reuters) - Canada's main stock on Monday clawed back most of its earlier decline as investors looked for buying opportunities after the index was pressured by expectations that the Federal Reserve would begin hiking interest rates over the coming months.
The Toronto Stock Exchange's S&P/TSX composite index ended down 12.13 points, or 0.06%, at 21,072.32, after touching its lowest intraday level since Dec. 21 at 20,790.89.
"I think there is this push and pull going on in markets," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth. "I don't think it has much to do with Omicron. I think it has more to do with the Fed."
Despite the fast-spreading Omicron coronavirus variant, money markets are betting that the Fed could hike as soon as March.
Higher interest rates would reduce the value to investors of the future cash flows that technology and other high growth sectors rely on to support lofty valuations.
"I think it is an opportunity to buy on the dips, especially big tech, which is being hit the hardest," Small said.
The technology group closed lower for a sixth straight session, falling 0.4%. The heavily-weighted financials group was down 0.3%, while industrials ended 0.9% lower.
In contrast, the materials group, which includes precious and base metals miners and fertilizer companies, added 1.6%, helped by gains for gold mining stocks. Gold rose 0.3% to $1,801.61 per ounce.
Healthcare also rallied, led by a 13.5% advance in the shares of cannabis producer Tilray Inc after the company reported surprise quarterly profit on cost cuts.
(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Alistair Bell)