Canada’s commodity-heavy stock index fell on Wednesday as oil prices declined, while investors digested data showing domestic annual inflation rate held steady in October.
By 10:37 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 51.55 points, or 0.26%, at 19,943.23, after closing higher in the previous session.
The energy sector dropped 1% as crude prices fell sharply following reports that Russian oil shipments on the Druzhba pipeline to Hungary had restarted.
Canada’s annual inflation rate held steady at 6.9% in October, as gasoline prices rose after OPEC+ countries announced production cuts, while higher interest rates pushed up mortgage costs by 11.4%, the largest jump since February 1991.
“Apart from the gas prices, another side of the story is that in a world of U.S. dollar strength the currency effects are starting to drive a wedge between the U.S. and Canadian inflation numbers,” said Eric Lascelles, chief economist at RBC Global Asset Management.
“There is a 40% chance of a 50 basis points of tightening if inflation doesn’t show more evidence of easing as we’ve seen in the United States,” he added.
C$ pulls pack from 8-week high as inflation steady
The BoC has hiked its benchmark rate by 350 basis points since March to 3.75%, one of its fastest tightening cycles ever. Money markets are betting on a 25-basis point increase on Dec. 7.
Among gainers, Burger King owner Restaurant Brands International Inc rose 7.1% after it said it appointed former Domino’s Pizza CEO Patrick Doyle as executive chairman, as the firm tries to expand its digital sales.
The consumer staples sector rose 1.5%, led by a 2.6% gain in shares of Loblaw Cos Ltd after it posted upbeat third-quarter revenue as the Canadian retailer credited robust demand for groceries and drugs despite higher prices.
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