Canada's main stock index posted its lowest close in five weeks on Friday, weighed by a move lower in financials and a fall in shares of auto parts maker Magna International Inc (MG.TO) despite reporting better-than-forecast quarterly profit.

The Toronto Stock Exchange's S&P/TSX composite index ended down 40.87 points, or 0.27 per cent, at 15,033.38, its lowest close since July 7. For the week, the index lost 1.5 per cent.

"You are getting a bit of a fear trade that is going on in the market," said Sid Mokhtari, market technician, institutional equity research, CIBC World Markets.

President Donald Trump issued a new threat to North Korea, saying the U.S. military was "locked and loaded" as Pyongyang accused him of driving the Korean peninsula to the brink of nuclear war.

U.S.-North Korea tensions and softer-than-expected U.S. inflation data have pushed bond yields lower this week. Canada's 10-year yield on Friday touched its lowest intraday level in nearly a month at 1.837 percent.

The move lower in yields has weighed on Canadian financial shares, Mokhtari said. Lower yields raise the value of insurance companies' liabilities and reduce net interest margins of banks.

The overall financials group slipped 0.4 per cent. Onex Corp (ONEX.TO) dropped 4.7 per cent to $95.75 after mixed revisions by security analysts to the ratings on the private equity company's stock, while Bank of Montreal (BMO.TO) declined 1.1 per cent to $92.01.

Magna fell 3.1 percent to C$57.91 despite reporting a higher quarterly profit on increased demand in Europe and Asia and raising its full-year sales forecast for the second time in three months.

Optimism that auto parts makers will benefit from a pick-up in economic growth has been offset by worries that the auto industry has reached the peak of its cycle, said Mokhtari.

Telus Corp (T.TO) was also one of the most influential movers on the index, falling 1.6 per cent to $44.82 after it reported lower-than-expected quarterly earnings.

Six of the index's 10 main groups lost ground. The materials group, which includes precious and base metals miners and fertilizer companies, retreated 0.7 per cent.

Wheaton Precious Metals Corp (WPM.TO) fell 5.1 per cent to $24.19 after it reported lower-than-expected revenue after the close on Thursday.

Enerplus Corp (ERF.TO) jumped 8.3 per cent to $11.65 after the oil and gas company increased its production guidance, while the broader energy group ended 0.1 per cent lower.\

U.S. crude oil prices settled 0.5 per cent higher at US$48.82 a barrel.