Canadian Market Drifts Lower In Cautious Trade

(RTTNews) - The Canadian market is down in negative territory Tuesday morning, as data showing an increase in the nation's consumer price inflation dimmed the extent of rate cuts this year although the Canadian central bank is widely expected to lower interest rate by 25 basis points on Wednesday.

Investors are also awaiting the Federal Reserve's monetary policy announcement on Wednesday.

Materials and healthcare stocks are among the major losers. Energy stocks are faring well.

The benchmark S&P/TSX Composite Index was down 175.93 points or 0.6% at 29,255.09 nearly half an hour before noon.

Baytex Energy is rising nearly 7.5%. Vermilion Energy is gaining about 4.75%, while Whitecap Resources, Tourmaline Oil Corp, Advantage Oil & Gas, Parex Resources, Nuvista Energy, Headwater Exploration, Paramount Resources, Peyto Exploration, Canadian Natural Resources and Cenovus Energy are up 2.3 to 3.5%.

Materials stocks Orla Mining, Endeavour Silver Corp., Alamos Gold, New Gold, Wesdome Gold Mines, G Mining Ventures, First Majestic Silver Corp, Aya Gold & Silver and Eldorado Gold are down 3 to 4.2%.

Data from Statistics Canada showed the annual inflation rate in Canada rose to 1.9% in August, from 1.7% in July, but below the expected 2% and staying below the BoC's 2% midpoint for the fifth straight month.

On a monthly basis, the CPI edged down by 0.1%, after a 0.3% increase in July.

Canada's annual core inflation held steady at 2.6% in August, unchanged from July and slightly below market expectations of 2.7%. On a monthly basis, core consumer prices were flat, following a 0.1% increase in July.

According to a report from Canada Mortgage and Housing Corporation, housing starts in Canada declined 16% in August to 245,791 units from a revised 293,537 in July. Housing starts were expected to drop to 277,500.