By Purvi Agarwal
(Reuters) -Canada’s main stock index tumbled to its lowest point in over a month on Tuesday, dragged down by weakness in materials shares, as investors remained cautious due to heightened tensions in the Middle East.
At 10:04 a.m. ET (14:04 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 167.15 points, or 0.77%, at 21,573.05.
The material sector, which houses metal miners and fertilizer companies, fell 2.1%, pulled down by miners as prices of both gold and base metals retreated. [GOL/] [MET/L]
The sector is set to log its worst day since February.
“Any geopolitical risk, if it unfolds, is negative for risk assets,” said Macan Nia, co-chief investment strategist at Manulife Investment Management.
Nine out of the eleven sectors were logging losses, while energy and rate-sensitive technology shares were the only outliers with 0.1% and 0.7% gains, respectively.
On the data front, Canada’s annual inflation rate ticked up to 2.9% in March, while core inflation measures eased for a third consecutive month, data showed on Tuesday.
“It shows the story that the disinflation that we’re experiencing has continued. (Disinflation) is more broad-based and that helps the case for the BoC to begin cutting in June”, Nia added.
Money market bets for a June rate cut increased to over 50% from 44% before data. [0#BOCWATCH]
Investors will now focus on the country’s federal budget, due on Tuesday at 4:00 p.m. EDT, where Finance Minister Chrystia Freeland is expected to propose raising taxes.
In corporate news, Barrick Gold tumbled 6.0% after the miner reported lower-than-expected preliminary gold production for the first quarter, hurt by planned maintenance at its mines.
Meanwhile, in the U.S., big banks Morgan Stanley and Bank of America beat first-quarter estimates.