By Johann M Cherian
(Reuters) - 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 had climbed 0.8% to 20,080.38, hovering near 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 nearly 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 now 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 rallied 3.9% as investors bet the slower pace of rate hikes will boost the highly valued stocks.
The real estate sector 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)