Investors react negatively to US inflation data, causing TSX to fall

Canada's main index of stocks fell on Wednesday, part of a wider decline. Mixed U.S. data on inflation reduced expectations for a 50-basis point rate cut next week in the United States.

At 10:19 am. The S&P/TSX Composite Index of the Toronto Stock Exchange was down 126.22 or 0.55% at 22,876.87 by 14:19 GMT.

At least 10 sectors experienced declines. The industrials sector led the way, with a 1% decrease, mainly due to SSR Mining, which fell 3.1%; Orla Mining, which dropped 2.5%; and OceanaGold, which slipped by 2.0%.

Wall Street, where major indexes fell following key inflation data, also gave domestic markets their cues.

Consumer prices in the United States rose modestly in August. However, persistent sticky inflation could deter Federal Reserve from cutting interest rates by a half point next week.

Allan Small, senior investment advisor with Allan Small Financial Group and iA Private Wealth, says that "Fed rates cutting in general is good for our market", but "I believe the markets will be volatile over the next six months."

Investors also responded to Tuesday's first U.S. Presidential debate between Donald Trump & Kamala Harris, which boosted Harris' chances of winning the White House this November.

Dollarama, a discount retailer, grew 4.9% following a second-quarter profit beating.

The TSX energy sector rose by 0.5% while the financials fell 0.2%.

Canadian Natural Resources Ltd., Pembina Pipeline Corp. and Canadian National Railway Co. were the most actively traded stocks by volume.

Gold prices dropped on Wednesday, as the dollar and Treasury yields rose after U.S. Inflation data. Brent crude and West Texas Intermediate crude futures both gained 1.4%.

Canada's largest exports are crude oil and gold.

The TSX has gained 9.6% this year. (Reporting and editing by Shreya Biwas and Vijay Kishore in Bengaluru)

(source: Reuters)