Canadian Market Down Marginally After BoC Rate Decision

(RTTNews) - Canadian stocks are turning in a mixed performance Wednesday morning, with investors digesting the nation's central bank's interest rate decision, and reacting to a slew of quarterly earnings announcements.

The Bank of Canada today reduced interest rates by another quarter point, as widely expected, saying that the decision to lower rates for the second straight meeting came as broad price pressures continue to ease and inflation is expected to move closer to 2%.

The benchmark S&P/TSX Composite Index is down 25.89 points or 0.11% at 22,787.86 about half an hour to noon.

Bausch Health Companies (BHC.TO) is down as much as 32.5%. Tilray Inc (TLRY.TO) is lower by about 2.7%, while Chartwell Retirement Residences (CSH.UN.TO) and Sienna Senior Living Inc (SIA.TO) are up 1.35% and 0.85%, respectively.

Materials shares Novagold (NG.TO), MAG Silver Corp (MAG.TO), First Quantum Minerals (FM.TO) and Calibre Mining (CXB.TO) are down 3.3 to 5.5%.

The Canadian central bank said this morning that it has reduced its target for the overnight rate by 25 basis points to 4.5%, with the bank rate at 4.75% and the deposit rate at 4.5%.

With ongoing excess supply lowering inflationary pressures, the Bank of Canada said its preferred measures of core inflation are expected to slow to about 2.5% in the second half of 2024 and ease gradually through 2025.

The Bank of Canada also said consumer price inflation is expected to come down below core inflation in the second half of this year, largely because of base year effects on gasoline prices.

However, the central bank noted price pressures in some important parts of the economy—notably shelter and some other services—are holding inflation up.

The Bank of Canada said its Governing Council is carefully assessing these opposing forces on inflation and noted future monetary policy decisions will be guided by incoming information and their assessment of their implications for the inflation outlook.