TSX sluggish as gains in CPI are offset by energy shares

Canada's main index of stocks was down on Tuesday, as the losses in energy shares tempered gains from consumer price data which showed that inflation had cooled to a low of 40 months in July. This raised hopes for a rate cut next month.

At 9:56 am. The S&P/TSX Composite index rose 3.48 points or 0.02% to 23,119.87 ET (13.56 GMT), hovering near its record highs.

The annual rate of inflation in Canada dropped to 2.5%, but it rose 0.4% monthly, which indicates that the Bank of Canada may lower rates in September.

This week, we will get the retail sales figures. "If it shows continued weakness, it will set the path for them to keep cutting each meeting throughout the rest of the calendar year," Macan Nia said, co-chief Investment Strategist at Manulife Investment Management.

A poll suggests that the benchmark index could extend its record-breaking rally in the months ahead and up to 2025, as lower borrowing rates combat the effects of a possible slowdown in economic activity on corporate profits.

Energy led the losses on the Toronto Stock Exchange. It fell nearly 1%, despite an increase in oil prices.

The tech and communications capped shares also fell around 0.4%.

Materials shares rose 1.4%, following gold prices which reached a new record against a weaker US dollar and increased bets on a September rate cut.

Gran Tierra Energy, a stock in the individual market, fell by more than 5% following its offer to purchase i3 Energy of London for 174.1 million pounds (226.23 millions).

The U.S. Federal Reserve chair Jerome Powell will be speaking at the Jackson Hole Economic Symposium in Wyoming on Friday. Powell has acknowledged that a rate cut could happen as early as September.

The markets expect the U.S. Central Bank to reduce interest rates by 25 basis points at its policy meeting next week. (Reporting by Nikhil Sharma in Bengaluru; Editing by Shreya Biswas)

(source: Reuters)