CANADA STOCKS-TSX falls as financials and miners offset relief from softer inflation

By Reuters News

By Utkarsh Hathi

Oct 19 (Reuters) - Canada's main stock index fell on Monday, dragged down by financials and mining stocks, while investors assessed softer-than-expected domestic inflation data for September ahead of the Bank of Canada's interest rate decision next week.

The S&P/TSX Composite Index .GSPTSE was down 0.69% at 35,928.52 points at 10:31 a.m. ET.

  • Energy stocks .SPTTEN were subdued, with West Texas Intermediate crude prices down nearly 1%

  • Materials sector .GSPTTMT, including metal miners, down 1.1% on weaker gold and copper prices

  • Meanwhile, Canada's consumer price index (CPI) rose by 0.1% in September from August, and 3.1% on a year-on-year basis, driven by higher gasoline and diesel prices

  • Analysts polled by Reuters had expected a 3.2% annual increase in inflation

  • The yield on Canada's benchmark 10-year bond rose over 2 basis points to 3.90% following the data

  • Financials .SPTTFS, the most heavily weighted sector on the benchmark, fell 0.7%

  • Traders are now pricing in a 68% chance of a Bank of Canada interest rate hike next week, down from 74% before the data, according to LSEG data

  • "We do see multiple hikes in 2027 given what is happening to the global economy and other central banks in the world are hiking. Canada might be entering that new cycle of tightening," said Michael Dehal, senior portfolio manager, Dehal Investment Partners at Raymond James

  • The Bank of Canada is expected to raise its quarterly inflation forecast significantly this month, the central bank's Governor Tiff Macklem said on Saturday

  • Rate-sensitive real estate sector .GSPTTRE was down 0.9%

  • Tech stocks .SPTTTK rose 0.5%, tracking a 1.3% rise in the Nasdaq Composite index .IXIC on Wall Street due to a broader rebound in the sector led by AI-linked stocks

  • Air Canada AC.TO fell 4.3% after brokerage Jefferies cut the stock's rating to "underperform" from "hold"

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