CANADA STOCKS-TSX extends weekly gain as higher commodity prices offset Mideast uncertainty
By Fergal Smith
March 27 (Reuters) - Canada's main stock index edged higher on Friday as higher commodity prices boosted resource shares, but uncertainty around a resolution to the Middle East conflict helped limit gains.
The S&P/TSX Composite Index .GSPTSE ended up 73.13 points, or 0.2%, at 31,960.65. For the week, the index added 2.1%, after three straight weekly declines.
The war in the Gulf is still expected to last weeks, not months, and Washington can meet all its objectives without using ground troops, U.S. Secretary of State Marco Rubio said.
"I'm not sure any one believes that this is going to be a short-term war. And if that's the case then inflationary pressures are going to be greater," said Michael Sprung, president at Sprung Investment Management.
"The big worry in investors minds is becoming (the prospect of) higher interest rates with the possibility of recession."
Investors are leaning toward three interest rate hikes this year from the Bank of Canada, after having expected no change in rates before the conflict began. 0#CADIRPR
U.S. consumer sentiment fell to a three-month low in March as the war stoked inflation worries and cast a shadow over the economic outlook.
The Canadian economy has already slowed, hampered by trade uncertainty.
The prospect of a more protectionist United States has spurred efforts to reduce Canada's economic reliance on its southern neighbor. Canada's minister of international trade said that he hopes to conclude a free-trade agreement with South America's Mercosur bloc by the autumn.
Energy shares .SPTTEN rose 2.8% as the price of oil CLc1 settled 5.5% higher at $99.64 a barrel. Investors have worried that a prolonged conflict could continue to disrupt energy supplies.
The materials group .GSPTTMT, which includes metal mining shares, added 3.4% as the price of gold XAU= benefited from dip buying.
Seven of the 10 major sectors ended lower, including consumer discretionary .GSPTTCD, which lost 1.9%.
Both industrials .GSPTTIN and heavily weighted financials .SPTTFS were down 1.1%.
