Canada’s main stock index was rangebound on Monday as gains in energy stocks outweighed losses in utility shares, while investors awaited U.S. inflation data and the Bank of Canada’s decision on monetary policy due later this week.
At 10:01 a.m. ET (1401 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 11.04 points, or 0.06%, at 19,842.08.
Utilities stocks slipped 0.5%, on track to decline for the fourth straight session.
Canada’s technology sector slipped 0.4%, parallel to a decline in the tech-heavy U.S. Nasdaq index.
Helping limit losses, energy stocks gained 0.9% as expected crude supply cuts from Saudi Arabia and Russia briefly supported the oil market.
Market participants will gauge the rate hike trajectory of the Federal Reserve on the back of U.S. inflation numbers coming on Wednesday as corporate America’s quarterly earnings season kicks off later this week.
The Bank of Canada is also heading toward a second consecutive quarter-point rate hike on Wednesday, analysts said, after a month of economic data showed resilient growth and sticky underlying inflation.
Technology, financials stocks drag Toronto shares lower
Twenty of 24 economists surveyed by Reuters also expect a 25-basis-point rate hike and anticipate the central bank to “hold” rates steady into 2024.
“There’s a lot of cash on the sidelines and inflation is coming down rapidly and the narrow breadth of the market is broadening out,” said Steve Palmer, president and CEO of AlphaNorth Asset Management.
The policy meeting comes at a crucial juncture where talks between dock workers at a strike and their employers have resumed after four days away from the negotiation table. Economists had said the longevity of the strike could weigh on inflation.
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