By Robb M. Stewart
Stocks on Canada's biggest exchange pulled back Tuesday after data showing an unexpected acceleration in inflation last month cast doubts on whether the central bank remains on course for back-to-back rate cuts.
In midday trading, the Toronto Stock Exchange's S&P/TSX Composite Index was 0.3% lower, at 21782.46. Declines were broad across index components, led by weakness in the finance sector.
The blue-chip S&P/TSX 60 was down 0.2%, at 1301.66.
The country's big banks were mixed, with National Bank of Canada up 0.8% and Royal Bank of Canada advancing 0.3%, but Toronto-Dominion Bank and Bank of Montreal each losing 0.5%.
A pullback in oil futures after Brent crude advanced the previous session weighed on energy stocks, with Athabasca Oil losing 1.4%, Enbridge declining 0.3% and Suncor retreating 0.7%.
Canada's consumer-price index, a measure of goods and services prices across the economy, rose 0.6% in May and 2.9% from a year earlier, Statistics Canada said. That was faster than the 2.6% annual advance economists had forecast and comes after inflation eased to 2.7% in April.
The advance in inflation puts much more weight on coming data to offer signs the trend of cooling price pressures is intact. Analysts said money market pricing for a rate cut at the next Bank of Canada policy meeting in late July narrowed to a roughly 40% chance from about 60% just before the inflation report was released.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
06-25-24 1225ET
