CANADA STOCKS-TSX falls as materials stocks drag
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TSX down 1.2%
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Material sector drags
(Updated at 10:17 a.m. ET/ 1517 GMT)
By Purvi Agarwal
Feb 5 (Reuters) - Canada's main stock index fell on Monday, dragged down by material-linked companies tracking lower metal prices, while investors scaled back hopes of an early rate cut by the Federal Reserve following Chair Jerome Powell's recent comments.
At 10:17 a.m. ET (15:17 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 252.99 points, or 1.2%, at 20,832.1.
Materials stocks led declines, falling 2.1% after gold prices dropped to over-a-week low on a higher dollar and bond yields, while Chinese demand concerns weighed on copper prices.
Utilities stocks fell 2.0%. The sector was pulled down by Innergex Renewable Energy that slipped 5.2%.
In an interview on Sunday, Fed Chairman Jerome Powell said that the U.S. central bank can be "prudent" in weighing rate cuts, with a strong economy allowing central bankers time to build confidence inflation will continue falling.
"I don't think there was too much of a surprise. March rate cut is pretty much off the table and people should reset", said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth.
"There are expectations of a rate cut, mid-year at the earliest unless the economy in the U.S. and, for that matter, the economy in Canada really starts to falter", Small said.
Investors will also look forward to key domestic employment data due on Friday to gauge the timing of the Bank of Canada's rate cuts.
Separately, Canadian service sector activity slowed for an eighth straight month in January as new business ebbed and cost pressures intensified, but the pace of decline eased from December, S&P Global Canada services PMI data showed on Monday.
Amongst individual stocks, Brookfield Asset Management lost 1% after the company said it had raised $10 billion in the first closing of its second "Brookfield Global Transition Fund (BGTF II)". (Reporting by Purvi Agarwal in Bengaluru; Editing by Ravi Prakash Kumar)
