Sept 16 (Reuters) - Canada's benchmark stock index fell on Tuesday, dragged down by gold mining and material shares, with investors on edge ahead of monetary policy announcements from the Bank of Canada and the U.S. Federal Reserve later in the week.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE), dipped 0.3% at 29,339.94 points by 10:00 ET (1400 GMT), remaining close to Monday's record high.
Canada's annual inflation rose 1.9% in August, driven by petrol and food prices, but was below the 2% forecast by a Reuters poll of analysts.
"With core measures of inflation likely to cool further in the months ahead, thanks to the slack building up in the economy and the removal of many retaliatory tariffs on September 1st, we not only expect a 25bp cut tomorrow but also a further reduction at the October meeting," said Andrew Grantham, senior economist at CIBC Capital Markets, in a note.
The BoC is widely expected to lower its rate by a quarter point on September 17, with money markets expecting an over 97% chance of this cut.
Global markets, including the TSX, have been scaling record highs over the previous few sessions, with markets fully pricing in a Fed rate cut this week.
On the day, gold mining stocks (.SPTTGD), fell 0.7% with New Gold (NGD.TO), Orla Mining (OLA.TO), and Alamos Gold (AGI.TO), down between 2% and 3.8%.
Bausch Health (BHC.TO), fell 1.9%, dragging on healthcare stocks, while Chartwell Retirement Residences (CSH_u.TO), was down 1%.
Offsetting losses, energy index (.SPTTEN), added 1.3%, with Vermillion Energy (VET.TO), and Parex Resources (PXT.TO), up 2.3% each.
Among other stocks, Teck Resources (TECKb.TO), shares lost 2.2% with Canada's industry minister saying she would be meeting the CEOs of Teck and Anglo American (AAL.L), next week to discuss their proposed merger.
Reporting by Twesha Dikshit; Editing by Vijay Kishore
