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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 ( 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 ( GOLD ) and First

Majestic Silver ( AG ) 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, 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 ( MS ) and

Bank of America ( BAC ) beat first-quarter estimates.