CANADA STOCKS-Toronto market slides to one-month low as materials drag

Purvi Agarwal
2-min read

*

TSX down 0.8%

*

Materials shares lead decline

*

Annual inflation ticks up to 2.9% in March

(Updated at 10:04 a.m. ET/ 1404 GMT)

By Purvi Agarwal

April 16 (Reuters) - Canada's main stock index tumbled to its lowest point in over a month on Tuesday, dragged down by weakness in materials shares, as investors remained cautious due to heightened tensions in the Middle East.

At 10:04 a.m. ET (14:04 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 167.15 points, or 0.77%, at 21,573.05.

The material sector, which houses metal miners and fertilizer companies, fell 2.1%, pulled down by miners as prices of both gold and base metals retreated.

The sector is set to log its worst day since February.

"Any geopolitical risk, if it unfolds, is negative for risk assets," said Macan Nia, co-chief investment strategist at Manulife Investment Management.

Nine out of the eleven sectors were logging losses, while energy and rate-sensitive technology shares were the only outliers with 0.1% and 0.7% gains, respectively.

On the data front, Canada's annual inflation rate ticked up to 2.9% in March, while core inflation measures eased for a third consecutive month, data showed on Tuesday.

"It shows the story that the disinflation that we're experiencing has continued. (Disinflation) is more broad-based and that helps the case for the BoC to begin cutting in June", Nia added.

Money market bets for a June rate cut increased to over 50% from 44% before data.

Investors will now focus on the country's federal budget, due on Tuesday at 4:00 p.m. EDT, where Finance Minister Chrystia Freeland is expected to propose raising taxes.

In corporate news, Barrick Gold tumbled 6.0% after the miner reported lower-than-expected preliminary gold production for the first quarter, hurt by planned maintenance at its mines.

Meanwhile, in the U.S., big banks Morgan Stanley and Bank of America beat first-quarter estimates. (Reporting by Purvi Agarwal in Bengaluru; Editing by Ravi Prakash Kumar)