Toronto stocks fall; BoC cuts rate by 50 bps
Updated at 10:15 a.m. ET/ 1415 GMT
By Nikhil Sharma
Oct 23 (Reuters) -Canada's main stock index slipped on Wednesday due to falling commodity stocks, as investors evaluated a half-point interest rate cut by the Bank of Canada and anticipated further reductions in the future.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 54.78 points, or 0.22%, at 24,661.92.
The Canadian central bank slashed its borrowing costs by 50 basis points, bringing the benchmark rate to 3.75% from 4.25%, and hailed signs of the country returning to a low-inflation era.
The action came broadly in line with the market expectations and was the first bigger-than-usual move in more than four years.
Now the focus has shifted to the top bank's December policy meeting where traders are pricing in 94.3% chance of a 25-basis-point reduction. 0#BOCWATCH
"The fact that the overnight rate is still above the neutral rate is supportive of more cuts," said Ian Chong, portfolio manager at First Avenue Investment Counsel.
Neutral rates are rates that neither restrict nor stimulate economic growth. BoC estimates this range to be between 2.25% and 3.25%. With inflation slipping below the bank's 2% target, concerns about economic growth provide the BoC with a cushion to consider more rate cuts.
Among sectors, Canada's heavyweight energy sector .SPTTEN fell 0.7% as oil prices dropped after industry data showed U.S. crude inventories swelled more than expected. O/R
The materials sector .GSPTTMT fell 0.8% as gold prices slipped after hitting a record high amid uncertainty around U.S. elections, while losses in copper prices also affected the sector.GOL/ MET/L
In contrast, industrials .GSPTTIN and consumer discretionary .GSPTTCD stocks rose 0.3% and 0.4%, respectively.
Among individual stocks, First Quantum Minerals FM.TO rose 1.6% after copper miner beat third-quarter profit estimates.
Domestic markets also took cues from Wall Street where the benchmark S&P 500 .SPX fell 0.45% as Treasury yields continued to rise. .N.
Reporting by Nikhil Sharma in Bengaluru; Editing by Vijay Kishore
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