CANADA STOCKS-TSX retreats from 2-year high as investors rethink rate cut bets
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TSX ends down 0.6% at 21,829.85
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Communication services index falls 1.5%
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Energy rises 0.9%; oil settles at 4-month high
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Lithium Americas rises 5.6% on US DOE loan
(Updates at market close)
By Fergal Smith
March 14 (Reuters) - Canada's main stock index fell on Thursday, consolidating some recent gains, as hotter-than-expected U.S. inflation data pressured stocks that are sensitive to interest rates.
The Toronto Stock Exchange's S&P/TSX composite index ended down 140.26 points, or 0.6%, at 21,829.85, a day after posting its highest closing level since April 2022.
U.S. stocks also fell as a jump in producer prices left investors wondering if the Federal Reserve might wait longer than expected to cut interest rates. The U.S. central bank is due to make a policy decision next Wednesday.
"Investors are recalibrating their interest rate expectations following today's inflation read," said Brandon Michael, senior investment analyst at ABC Funds.
"We believe today's weakness in Canadian stocks represents a consolidation period as the market digests significant gains accrued over the past month."
The Toronto market has rallied about 6% since mid-February.
Interest-rate sensitive stocks were among the biggest decliners, with the utilities sector falling 0.9% and communication services ending 1.5% lower.
Heavily weighted financials lost 0.8% and the materials group, which includes precious and base metals miners and fertilizer companies, was down 1% as gold gave back some recent gains.
Energy rose 0.9% as the price of oil settled up 1.7% at $85.42 a barrel, a four-month high, after the International Energy Agency raised its view on oil demand growth this year.
Shares of Lithium Americas rose 5.6% after the U.S. Department of Energy granted the miner a conditional commitment loan of $2.26 billion to finance the construction of its Thacker Pass project in Nevada. (Reporting by Fergal Smith in Toronto and Shubham Batra in Bengaluru; Editing by Vijay Kishore and Richard Chang)
