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On Tuesday, Canada’s main stock index declined as a drop in oil prices pressured energy shares, though losses were moderated by anticipation of a possible interest rate cut by the Bank of Canada.
The Toronto Stock Exchange's S&P/TSX Composite Index ended the day down 58.9 points, or 0.3%, settling at 22,813.75. This decrease partially reversed the previous day’s gains.
Despite sector-specific declines, the overall market showed resilience. Allan Small, Senior Investment Advisor at Allan Small Financial Group with iA Private Wealth, noted that the index was "hanging in" despite weaknesses in major sectors.
The financials and energy sectors were the primary contributors to the decline, losing 0.2% and 1.4%, respectively. The energy sector was particularly impacted by a drop in oil prices, which fell to a six-week low. Oil prices settled at $79.96 a barrel, down 1.8%, due to expectations of a ceasefire in Gaza and growing demand concerns in China.
The Bank of Canada is anticipated to announce a 25-basis-point cut in its benchmark interest rate to 4.50% on Wednesday, marking its second consecutive rate reduction. This expectation follows recent data showing easing inflation. Small highlighted that the upcoming interest rate decision could significantly affect bank stocks, potentially boosting lenders as borrowing costs decrease and economic activity picks up.
In corporate news, Bank of Nova Scotia (TSX:BNS) appointed Anique Asher as its Chief Strategy and Operating Officer. This move is part of a series of senior-level changes under CEO Scott Thomson, who assumed leadership early last year. Shares of Bank of Nova Scotia declined by 0.8% following the announcement.
Industrials also contributed to the day's decline, falling 0.8%, although most other sectors posted gains, including a 0.5% increase in technology stocks.
