Fergal Smith

TORONTO (Reuters] – Canada’s stock market closed slightly higher Friday, but it was still lower for the first week in the year due to uncertainty surrounding faster than expected U.S. rate increases.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 12.25 points, or 0.06%, at 21,084.45 on Friday. The week’s total was down 0.65%, after the Federal Reserve struck a hawkish note on Wednesday in the minutes following its most recent meeting.

Sadiq Adatia (chief investment officer, BMO Asset Management) stated that “the story is still tied with the Fed and rising rates coming sooner than anticipated.”

Wall Street’s weekly drop continued as Wall Street investors were still concerned about the U.S. Interest Rate outlook, despite weaker-than expected December payrolls reports.

The Canadian economy saw twice the employment growth in December than was expected, which supports expectations that the Bank of Canada will increase rates in the months ahead.

Adatia stated that there has been a lot of selling going on in high-flying tech companies.

Investors lose value in future cash flow that technology and high-growth sectors will produce due to higher interest rates.

Toronto’s tech group lost 1.4% for the fifth session. However, gains were made for heavily weighted financials and energy stocks.

Financials finished 0.4% higher while energy ended 0.9% better as crude oil continued its rally.

Prices settled at $78.90 per barrel Friday, 0.7% less than they were on Friday. However, prices rose nearly 5% week-over-week due to unrest in Kazakhstan.

Canada Goose Holdings (NYSE) Inc, an apparel manufacturer, was the worst performer. It fell 6.3% following UBS’s reduction of its target price.