Canadian Stocks Decline As Investors Assess Inflation Data

(RTTNews) - Canadian stocks pulled back on Monday as traders parsed economic indicators on inflation and awaited upcoming U.S. economic data releases with added pressure coming from mining stocks pulled down by weaker gold prices.

After opening below the previous week's close, the benchmark S&P/TSX Composite Index, after remaining volatile until noon, turned lower to trade firmly negative and close at 30,076.21, down by 250.25 points (or 0.83%).

Four of the 11 sectors posted gains today, with the consumer staples sector leading the pack.

Data released by Statistics Canada today revealed that the headline inflation rate in Canada fell to 2.20% in October from 2.40% in the previous month, within the ballpark of Bank of Canada's expected baseline.

The trimmed-mean core inflation rate which is closely tracked by the BoC, inched down to 3.00% from 3.10% in September.

Annual core inflation inched up to 2.90% from 2.80% in September.

The Consumer Price Index (CPI) month-on-month in Canada increased 0.20% in October over the previous month and core inflation month-on-month increased 0.60%.

Weeks before, U.S President Donald Trump abruptly halted all trade talks between the U.S. and Canada which had been going on since August when he imposed 35% tariffs on Canadian goods entering the U.S.

To combat the effects of U.S.-imposed tariffs that have severely affected the national economy, on November 4, Canadian Prime Minister Mark Carney presented his first budget with weightage given more to spend less and invest more.

Carney's budget which proposes around $90 billion in new investments over the next five years, is being put to test for a vote by Canadian MPs today.

Significantly, a victory would also serve as a "confidence vote" for the ruling Liberal Party whereas a defeat could result in a second federal election in less than a year.

In the U.S., the government shutdown that ended last week has changed investors' attention to upcoming economic reports (with Thursday's nonfarm payroll numbers attracting more attention) as well as the release of pending data.

Though recent remarks by U.S Federal Reserve officials hinted against an additional rate cut by year-end, speculation is rife that these data would support calls for another rate cut by the Fed.

In Canada, with headline inflation trending back towards the central bank's target, it supported Bank of Canada's stance to stay away after back-to-back rate cuts. Of note, last month, Governor Tiff Macklem and his team cut interest rates to 2.25%.

On the business front, Reuters report indicate that the board of Barrick Mining is exploring a potential split into two entities - one focusing on North American, and another one holding assets across Africa and Asia. The company has not yet confirmed the report officially.

Major sectors that gained in today's trading were Consumer Staples (0.76%), Communication Services (0.49%), Utilities (0.21%), and Healthcare (0.15%).

Among the individual stocks, Empire Company Ltd (1.82%), Maple Leaf Foods (1.45%), Loblaw CO (1.34%), and Quebecor Inc (2.17%) were the prominent gainers.

Major sectors that lost in today's trading were Industrials (1.14%), Materials (1.44%), Real Estate (1.54%), and IT (2.10%).

Among the individual stocks, Stantec Inc (6.18%), Brookfield Business (4.03%), Air Canada (4.02%), Colliers International Group Inc (4.77%), and Aya Gold and Silver Inc (5.25%) were the notable losers.

Superior Plus Corp (5.72%), Perpetua Resources Corp (4.92%), and Dundee Precious Metals (3.04%) were among the prime market-moving stocks today.