By Fergal Smith
(Reuters) -Canada’s main stock index edged higher on Monday as consumer-related shares notched gains and investors awaited Canadian inflation data that could guide expectations for a Bank of Canada interest rate cut.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 17.36 points, or 0.1%, at 27,922.85, with the index trading not far off the record closing high it posted last Wednesday.
Canada’s consumer price index report for July is due on Tuesday, with economists expecting the annual rate of increase in consumer prices to ease to 1.8% from 1.9% in June.
“If we get a very light inflation number, that might suggest a Bank of Canada rate cut, which would be positive for every stock basically just about,” said Lorne Steinberg, president, Lorne Steinberg Wealth Management Inc.
The Canadian central bank has left its benchmark rate on hold at 2.75% since March but has left the door open to further rate cuts if upward price pressures from trade disruptions are contained.
Consumer staples rose 1.4% and consumer discretionary added 0.8%, while the communication services index was up for an eighth straight day.
“We’re looking for some improvement finally to (telecommunication company) earnings going forward, and so for us the sector is very cheap and the dividend yields are sustainable,” Steinberg said.
The energy sector was down 0.4% even as the price of oil settled nearly 1% higher at $63.42 a barrel.
The materials group also lost ground, ending 0.3% lower, as gold and copper prices dipped.
Shares of Air Canada fell nearly 3% as the third day of a flight attendants’ strike led to the company suspending its third-quarter and full-year 2025 guidance.
(Reporting by Fergal Smith and Nikhil Sharma; Editing by Sahal Muhammed and Alistair Bell)
