(Updates after Bank of Canada rate decision)

By Ragini Mathur

Oct 29 (Reuters) - Canada's main stock index fell on

Wednesday as investors digested the Bank of Canada's cautious

tone, even as the central bank delivered its second consecutive

interest rate reduction.

At 10:22 a.m. ET (1422 GMT), Toronto's S&P/TSX composite

index was down 0.3% at 30,349.11 points.

The BoC reduced its key overnight interest rate to 2.25%, as

widely expected. The second consecutive quarter-point cut brings

down the rate to the lowest since July 2022.

However, it signaled this could mark an end to its cutting

cycle unless the outlook for inflation and the economy changed.

"I don't read it as too hawkish and I welcome the interest

rate cut," noted Matt Skipp, president of SW8 Asset Management.

"Outside of the disruption from tariffs and rhetoric out of

Washington, the underlying bigger concern would be weakness in

construction and real estate, which should keep the Bank of

Canada cutting rates in the short term."

Later at 2:00 p.m. ET, the U.S. Federal Reserve is expected

to implement a similar 25-basis-point rate reduction, guiding

the U.S. economy with limited economic data following nearly a

month of government shutdown.

On the TSX, consumer staples and consumer

discretionary led the downward momentum, falling 1.8%

and 0.8%, respectively.

Industrials also dropped 0.8%, while

rate-sensitive sectors such as financials, real estate

and utilities were also trading in the

red.

Bucking the trend, materials gained 1.4% with

gold rebounding nearly 2%.

Materials stocks have been instrumental in driving the

resource-heavy Canadian benchmark's about 23% gains this year,

as gold prices have surged over 50%.

Energy sector gained 0.8% as oil prices also

climbed, supported by decreasing U.S. crude inventories and

optimism surrounding upcoming talks between U.S. and Chinese

leaders.

U.S. President Donald Trump began the final leg of his Asia

trip, saying he had reached a deal with South Korea and was

optimistic about an agreement with China.

Earlier on Wednesday, Trump stated he "didn't come to South

Korea to see Canada," amid an ongoing trade spat between the

North American neighbors.