CANADA STOCKS-TSX hits another record high as rate cuts offset valuation concerns

By Fergal Smith

Sept 18 (Reuters) - Canada's main stock index rose on Thursday to another record high, led by technology shares, as central bank interest rate cuts offset concern among some investors that valuations are becoming stretched.

The S&P/TSX composite index .GSPTSE ended up 131.87 points, or 0.5%, at 29,453.53, eclipsing Monday's record closing high.

"We're dealing with markets that are fairly highly valued," said Michael Sprung, president at Sprung Investment Management. "Given the high valuations and the investor exuberance that seems to be apparent in the market, I think this is a time for caution."

The TSX's 12-month forward price-earnings ratio, a closely watched stock valuation metric, has climbed to 16.45, its highest level since May 2021, data from LSEG Datastream showed.

Both the Bank of Canada and the Federal Reserve cut interest rates by 25 basis points on Wednesday to support their economies, marking their first actions in months.

"On the one side we see the slowing economy, but on the other side there are still fears of inflationary pressures," Sprung said.

Investors expect just one more rate cut from the BoC by year-end. 0#CADIRPR

The technology sector .SPTTTK rose 1.7%, with shares of e-commerce company Shopify Inc SHOP.TO up 3%.

Financials, which account for 33% of the index's weighting, added 0.5%.

Four of the 10 major sectors ended lower, including energy. Energy was down 0.2% as the price of oil CLc1 settled 0.75% lower at $63.57 a barrel.

The proposed Anglo American-Teck Resources TECKb.TO merger has revived long-standing ambitions to share infrastructure at two major mines in northern Chile, but analysts say the plan could face hurdles to gain buy-in from Swiss miner and trader Glencore.

Shares of Teck ended 0.3% lower.