Sept 10 (Reuters) - Canada's main stock index edged up on Wednesday, led by materials shares, after cooler-than-expected U.S. producer inflation data boosted bets of a September interest rate cut by the Federal Reserve and lifted Wall Street peers.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE), was up 0.48% at 29,201.97 points, setting a new intraday record high.
Data showed on Wednesday that U.S. producer prices fell unexpectedly in August, dragged down by a decline in the cost of services.
Bets on a 25-basis-point cut at the Fed's September 16-17 meeting stood at 90%, while those on a larger 50-bps cut were at about 10%, CME's FedWatch tool showed.
"Generally if inflation stays benign that gives scope for the Bank of Canada to potentially cut interest rates as well, especially because the last two Canadian employment numbers were terrible," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Expectations that the BoC will resume its easing cycles have supported market sentiment since last Friday's disappointing jobs data.
On Wednesday, the probability of a 25-basis-point interest rate cut by the Canadian central bank on September 17 stood at 91.5%, according to data compiled by LSEG.
On the TSX, mining shares (.GSPTTMT), rose 1.4% on Wednesday as gold prices hovered near all-time highs.
An index of energy stocks (.SPTTEN), rose 1.3%, tracking gains in oil prices.
Among individual stocks, brokerage Scotiabank raised price target on Teck Resources (TECKb.TO), citing strong "potential for a bidding war", following the copper miner's deal to merge with Anglo American (AAL.L), to create a copper giant. Shares of the firm rose 2.7%."Yesterday's big merger with Teck Resources ... increases the potential for more mergers in the resource sector," said Cieszynski, adding that the deal is broadly positive for the stock market.
Reporting by Sanchayaita Roy in Bengaluru; Editing by Shreya Biswas and Sahal Muhammed
