TSX hits 2-week low as interest rate uncertainty hits sentiment

By Fergal Smith

(Reuters) -Canada's main index fell on Thursday to a near two-week low as the threat of higher interest rates took its toll on investor sentiment, with real estate shares and the shares of luxury parka maker Canada Goose among the biggest decliners.

The Toronto Stock Exchange's S&P/TSX composite index ended down 101.89 points, or 0.5%, at 19,348.81, its lowest closing level since Oct. 6.

U.S. stocks also fell as investors weighed comments from Federal Reserve Chair Jerome Powell and tried to determine whether the central bank would keep interest rates higher for longer. The U.S. 10-year yield climbed to a 16-year high near 5%.

"The world is in a precarious state right now with everything that is happening geopolitically and I think people still fear that interest rates if they don't stay stable then the tendency might be for them to go up," said Michael Sprung, president at Sprung Investment Management.

"That's really what's sapping investor confidence."

The Toronto market's real estate sector, which is particularly sensitive to higher interest rates, fell 1.7%, while heavily-weighted financials were down nearly 1%.

Canada Goose Holdings Inc shares fell 4.4% after two brokerages downgraded the stock.

Energy was the lone sector to post gains for a second straight day. It was up 0.2% as oil settled 1.2% higher $89.37 a barrel on worries that Israel's military campaign in Gaza could escalate to a regional conflict.

(Reporting by Fergal Smith in Toronto and Siddarth S in Bengaluru; Editing by Shweta Agarwal and Josie Kao)