CANADA STOCKS-TSX retreats from two-month high as US inflation data spooks investors

By Anand Gopal R and Fergal Smith

TORONTO, Nov 10 (Reuters) - Canada's main stock index fell on Tuesday, weighed by declines for metal mining shares, as hotter-than-expected US inflation data raised expectations for Federal Reserve interest rate hikes.

The S&P/TSX Composite Index .GSPTSE ended down 275.81 points, or 0.8%, at 36,170.45, after posting on Monday its highest closing level since September 4.

• US stocks also fell as US consumer prices increased more than expected in October, cementing expectations for a rate hike from the Fed next month and fueling concerns the central bank may be more aggressive in raising rates.

• Hotter inflation and Fed hikes "will likely put pressure on the US economy, which will then have a downstream effect on Canada as we’re a large trading partner of the United States," said Shiraz Ahmed, CEO of Sartorial Wealth.

• Canada sends about 70% of its exports to its southern neighbor, including oil.

• US crude oil futures settled 0.9% lower at $86.04 a barrel after US officials downplayed the need for additional military action against Iran, easing fears of additional Middle East supply disruptions.

• The materials sector .GSPTTMT, which includes metal mining shares, was the biggest drag on the index, falling 3.9%, as the potential for aggressive Fed tightening weighed on gold. Gold dropped 2.6% and copper was trading 1.8% lower.

• Consumer discretionary .GSPTTCD fell 0.8% and the interest-rate sensitive real estate sector .GSPTTRE was down 0.7%.

• Among the major decliners was GFL Environmental Inc GFL.TO. Its shares declined 7.2% after the waste management firm said it had rejected buyout proposals and would stay public.

• Just three major sectors ended higher. They included energy, which added 1.1%.