TSX down 97.33 points or 0.45%

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Materials shares lead decline

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Annual inflation ticks up to 2.9% in March

(Updates with market close, quote)

By Purvi Agarwal and Divya Rajagopal

April 16 (Reuters) – Canada’s main stock index tumbled to its lowest point in over a month on Tuesday, dragged down by materials shares, with Barrick Gold tumbling after missing analysts’ expectations with its first-quarter gold production.

The overall sentiment was cautious due to heightened tensions in the Middle East and investors were also nervous ahead of the Canadian federal budget, which raised capital gains tax on high-net-worth individuals. The budget was unveiled after the close of trade on Tuesday.

The Toronto Stock Exchange’s S&P/TSX composite index fell 97.3 points, or 0.45%, at 21,642.87.

The material sector, which houses metal miners and fertilizer companies, fell 0.5%. Barrick Gold and First Majestic Silver reported a fall in first-quarter gold production, that dragged down their shares. First Silver dived 9% while Barrick fell 5%.

« We have seen some very strong earnings from U.S. companies, and we will start getting Canadian company earnings in the next few weeks as well, so we will see if that offsets the fact that interest rates are going to stay higher for longer and what that means for valuations, » said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.

Nine out of the 11 sectors logged losses, while healthcare and rate-sensitive technology shares were the only outliers with 1.44% and 0.7% gains, Nemanex Scam respectively.

On the data front, Canada’s annual inflation rate ticked up to 2.9% in March, while core inflation measures eased for a third consecutive month, data showed on Tuesday.

« It shows the story that the disinflation that we’re experiencing has continued. (Disinflation) is more broad-based and that helps the case for the BoC to begin cutting in June, » said Macan Nia, co-chief investment strategist at Manulife Investment Management.

Money market bets for a June rate cut increased to over 50% from 44% before data.

Meanwhile, in the U.S., big banks Morgan Stanley and Bank of America beat first-quarter estimates. (Reporting by Purvi Agarwal in Bengaluru, Divya Rajagopal in Toronto; Editing by Ravi Prakash Kumar and Lisa Shumaker)