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CANADA STOCKS-Toronto stocks track Wall St higher on ebbing inflation worries

Reuters · 11/15/2022 10:51
CANADA STOCKS-Toronto stocks track Wall St higher on ebbing inflation worries

Adds comments; updates prices, details

U.S. Oct. inflation data softer than expected

TSX on track for second month of gains

By Johann M Cherian

- Canadian stocks followed their Wall Street peers higher on Tuesday after fresh evidence of easing U.S. inflation raised expectations that the Federal Reserve will slow its pace of interest rate hikes.

By 10:31 a.m. ET (1531 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE had climbed 0.8% to 20,080.38, hovering its strongest level in over 11 weeks.

Wall Street's main index climbed more than 1% after data showed U.S. producer prices rose lesser than expected in October, and services fell for the first time in two years.

"Markets are up because the PPI data confirmed what people saw in the consumer price reports from last Thursday," said Colin Cieszynski, chief market strategist at SIA Wealth Management. "It is a growing sense that the Fed could start to slow the pace of interest rate hikes."

Traders see a 91% chance that the Fed will raise rates by 50 basis points in its Dec. 14 meeting. IRPR

Rate-sensitive information technology sector .SPTTTK rallied 3.9% as investors bet the slower pace of rate hikes will boost the highly valued stocks.

The real estate sector .GSPTTRE jumped 1.2% as data showed Canadian home sales rose 1.3% in October from September, the first month-over-month gain since February.

Halfway into November, the TSX looked set for its second straight month of gains as investors welcomed signs of decade-high inflation cooling.

"Generally speaking, the central bank hawkishness that had driven markets down earlier has backed off a little with inflation falling... the economy in North America has held up relatively well too," Cieszynski added.

(Reporting by Johann M Cherian in Bengaluru; Editing by Shailesh Kuber)