By Johann M Cherian
(Reuters) - Canada's commodity-heavy stock index fell on Wednesday as oil prices declined, while investors digested data showing domestic annual inflation rate held steady in October.
By 10:37 a.m. ET (1537 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 51.55 points, or 0.26%, at 19,943.23, after closing higher in the previous session.
The energy sector dropped 1% as crude prices fell sharply following reports that Russian oil shipments on the Druzhba pipeline to Hungary had restarted. [O/R]
Canada's annual inflation rate held steady at 6.9% in October, as gasoline prices rose after OPEC+ countries announced production cuts, while higher interest rates pushed up mortgage costs by 11.4%, the largest jump since February 1991.
"Apart from the gas prices, another side of the story is that in a world of U.S. dollar strength the currency effects are starting to drive a wedge between the U.S. and Canadian inflation numbers," said Eric Lascelles, chief economist at RBC (TSX:RY) Global Asset Management.
"There is a 40% chance of a 50 basis points of tightening if inflation doesn't show more evidence of easing as we've seen in the United States," he added.
The BoC has hiked its benchmark rate by 350 basis points since March to 3.75%, one of its fastest tightening cycles ever. Money markets are betting on a 25-basis point increase on Dec. 7.
Among gainers, Burger King owner Restaurant Brands International (TSX:QSR) Inc rose 7.1% after it said it appointed former Domino's Pizza CEO Patrick Doyle as executive chairman, as the firm tries to expand its digital sales.
The consumer staples sector rose 1.5%, led by a 2.6% gain in shares of Loblaw Cos Ltd after it posted upbeat third-quarter revenue as the Canadian retailer credited robust demand for groceries and drugs despite higher prices.
(Reporting by Johann M Cherian in Bengaluru; Editing by Sriraj Kalluvila)