June 5 (Reuters) - Canada's main stock index posted on Friday its biggest decline in nearly four months as commodity prices fell and investors raised bets on Federal Reserve interest rate hikes, with technology and metal mining shares leading the move lower.
The Toronto Stock Exchange's S&P/TSX composite index ended down 803.61 points, or 2.3%, at 34,413.45, pulling back from a record closing high on Thursday and marking its biggest decline since February 12. For the week, the index was down 1%.
o Wall Street's major indices also posted steep losses as red-hot technology stocks suffered their largest daily decline this year after a stronger-than-expected May jobs report fueled fears of a hawkish policy pivot from the U.S. Federal Reserve.
o Canada's employment report also beat expectations. The economy added 87,800 jobs last month, wiping out much of the declines posted since the start of the year.
o "Canada's job market came roaring back to life in May," Derek Holt, head of capital markets economics at Scotiabank, said in a note.
o "This is the jobs report that the Bank of Canada has been dreaming about as they will heave a big sigh of relief to see further signs of a Q2 rebound in the works," Holt said.
o The Bank of Canada will hold its key overnight rate at 2.25% on June 10 and for the rest of the year, according to a majority of economists polled by Reuters, despite rising inflation risks stemming from higher energy prices.
o The materials group, which includes metal mining shares, tumbled 8.3% as gold and copper prices fell.
o Gold lost 3.2%, copper was down 4%, while the price of oil settled 2.7% lower at $90.54 a barrel on mounting hopes for de-escalation in the Middle East conflict.
o Energy was down 4.1%, with shares of TerraVest Industries Inc down 31.6%. Technology ended 4.4% lower.
o Helping to cap the TSX's losses, the consumer staples sector rose 2.8%.
(Reporting by Fergal Smith in Toronto and Tharuniyaa Lakshmi in Bengaluru; Editing by Joyjeet Das and Nia Williams)
By Fergal Smith
