Canada’s S&P/TSX Composite Index fell on Oct. 19 as financial and gold mining shares declined, while faster annual inflation put the Bank of Canada’s upcoming interest rate decision in focus.
The benchmark closed at 35,928.63, down 247.92 points, or 0.69%, Montréal Exchange data showed. Reuters reported that the preceding close had been the index’s highest in more than three weeks.
Reuters reported a 1.1% decline in the broader materials sector. Exchange figures showed the S&P/TSX Global Gold Index falling 10.47 points and the S&P/TSX Capped Energy Index rising 2.50 points. The S&P/TSX Capped Financials Index lost 4.67 points.
September’s annual consumer price inflation reached 3.1%, up from 3.0% in August, Statistics Canada said. Gasoline cost 27.8% more than a year earlier, while the annual inflation rate excluding gasoline slowed to 2.2% from 2.4%.
Separate labor data published Oct. 9 showed 68,000 fewer people employed in September than in August. The unemployment rate rose by 0.1 percentage point to 6.5%.
The Bank of Canada surveys released Oct. 19 gave a divided view of the economy. Firms expected stronger sales but remained cautious about adding workers. Consumers in the third quarter signaled plans to spend less even as their longer-term inflation expectations increased.
The business survey also examined how companies might respond to rising costs. About half the firms experiencing unusually steep cost increases expected to shift at least part of the burden to customers within 12 months. Competition limited some firms’ ability to raise prices.
The central bank kept its overnight rate target at 2.25% on Sept. 2. At the time, it linked inflation near 3% to high gasoline prices and said there was limited evidence of higher energy costs spreading to other prices. Its next rate announcement and Monetary Policy Report are scheduled for 9:45 a.m. ET on Oct. 28.
