*

February CPI inflation at 2.8%

*

K92 Mining ( KNTNF ) slips, co halts some operations at Papua New

Guinea

mine

*

TSX rises 0.3%

(Updated at 9:44 a.m. ET/1344 GMT)

By Shubham Batra

March 19 (Reuters) - Canada's main stock index rose on

Tuesday after the surprise fall in domestic headline inflation

in February raised hopes of early interest rate cuts by the Bank

of Canada.

At 9:44 a.m. ET (13:44 GMT), the Toronto Stock Exchange's

S&P/TSX composite index was up 65.01 points, or 0.3%,

at 21,902.19.

Canada's annual inflation rate in February unexpectedly

cooled to 2.8%, its slowest pace since June, and core inflation

measures eased to more than two-year lows, raising expectations

of a mid-year rate cut.

"The surprise fall in headline inflation to 2.8%, from 2.9%,

is further reason to expect the Bank of Canada to cut interest

rates soon, although we still think the Bank will wait until

June rather than springing a surprise at the April meeting,"

Stephen Brown, deputy chief North America economist at Capital

Economics said in a note.

Money markets priced in 76 basis points of interest rate

cuts in 2024 compared with 60 bps before the data, with the

first rate cut seen in June.

Rate-sensitive financials, consumer discretionary

and utilities sector rose between 0.6% and

0.8%.

Energy sector was the top performer for the day as

it rose 1.0% tracking oil prices.

Across the border, Wall Street slipped as the focus shifted

to the U.S. Federal Reserve's interest rate decision on

Wednesday for more clues on the central bank's timing of its

first rate cut.

In domestic company news, K92 Mining ( KNTNF ) slipped 3.1%

after the miner said underground operations at a gold mine in

Papua New Guinea have been temporarily suspended after a

non-industrial incident earlier this month led to the death of

an employee.

Brookfield Asset Management ( BAM ) was up 0.2% as the

company named insider Hadley Peer Marshall as chief financial

officer.