CANADA STOCKS-TSX advances as softer inflation boosts rate-cut optimism
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February CPI inflation at 2.8%
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K92 Mining slips, co halts some operations at Papua New Guinea mine
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TSX rises 0.3%
(Updated at 9:44 a.m. ET/1344 GMT)
By Shubham Batra
March 19 (Reuters) - Canada's main stock index rose on Tuesday after the surprise fall in domestic headline inflation in February raised hopes of early interest rate cuts by the Bank of Canada.
At 9:44 a.m. ET (13:44 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 65.01 points, or 0.3%, at 21,902.19.
Canada's annual inflation rate in February unexpectedly cooled to 2.8%, its slowest pace since June, and core inflation measures eased to more than two-year lows, raising expectations of a mid-year rate cut.
"The surprise fall in headline inflation to 2.8%, from 2.9%, is further reason to expect the Bank of Canada to cut interest rates soon, although we still think the Bank will wait until June rather than springing a surprise at the April meeting," Stephen Brown, deputy chief North America economist at Capital Economics said in a note.
Money markets priced in 76 basis points of interest rate cuts in 2024 compared with 60 bps before the data, with the first rate cut seen in June.
Rate-sensitive financials, consumer discretionary and utilities sector rose between 0.6% and 0.8%.
Energy sector was the top performer for the day as it rose 1.0% tracking oil prices.
Across the border, Wall Street slipped as the focus shifted to the U.S. Federal Reserve's interest rate decision on Wednesday for more clues on the central bank's timing of its first rate cut.
In domestic company news, K92 Mining slipped 3.1% after the miner said underground operations at a gold mine in Papua New Guinea have been temporarily suspended after a non-industrial incident earlier this month led to the death of an employee.
Brookfield Asset Management was up 0.2% as the company named insider Hadley Peer Marshall as chief financial officer. (Reporting by Shubham Batra in Bengaluru; Editing by Vijay Kishore)
