CANADA STOCKS-TSX pulls back from record highs as rate cut concerns cloud sentiment

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TSX down 0.5%

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Communication, tech stocks decline

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Cannabis firms gain after Florida Supreme Court decision

(Updated at 10:11 a.m. ET/ 1411 GMT)

By Purvi Agarwal

April 2 (Reuters) - Canada's main stock index is set to snap its three-session gaining streak as communication services and tech stocks, rattled by investor concerns around the timing of the Federal Reserve's interest rate cuts, dragged down the index.

At 10:11 a.m. ET (14:11 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 103.26 points, or 0.47%, at 22,081.99.

Communication services stocks led declines on the index with a 2.7% slide. Integrated telecommunication service provider Quebecor pulled down the sector with a 4.1% decline after brokerage BMO downgraded it to "market perform" from "outperform".

Information technology stocks followed suit, losing 1.7%. Crypto miners Hut 8 and Bitfarms dragged the sector with a 13.2% and 6.1% decline tracking a 6.3%. fall in Bitcoin.

"This modest weakness is really driven by concerns that the economic strength in the US and higher oil prices in the last couple of days, could delay the Fed's rate cuts", said Angelo Kourkafas, senior investment strategist at Edward Jones Investments.

The energy and materials sectors were the only outliers amid the broad sell-off with a 0.7% and 0.6% rise, tracking an upward tick in gold, copper and oil prices.

Bond yield on the benchmark Canadian government bond hit its highest since February 2024 in the session.

Data

suggesting strong economic growth in the U.S has investors adjusting their bets on the timing of interest rate cuts in the year.

"Now over the last couple of days, markets are pricing in slightly less than what policymakers project, and that re-calibration of expectations is triggering the pullback", Kourkafas added.

In corporate news, cannabis firms Canopy Growth Corp and Aurora Cannabis rose 7.5% and 9.6% after the Florida Supreme Court allowed voters to decide on the fate of recreational use of marijuana in the U.S. state through a referendum in November. (Reporting by Purvi Agarwal in Bengaluru; Editing by Tasim Zahid)