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TSX down 0.4%

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Producer prices rise by 1.5% in April

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Scotiabank up after beating profit estimates

(Updated at 10:21 a.m. ET)

By Shubham Batra

May 28 (Reuters) - Canada's main stock index dipped on

Tuesday, led by losses in industrials shares, while investors

assessed domestic producer price data for more clues on Bank of

Canada's interest rate path.

At 10:21 a.m. ET (14:21 GMT), the Toronto Stock Exchange's

S&P/TSX composite index was down 86.5 points, or

0.39%, at 22,286.88.

Producer prices in Canada rose 1.5% in April from March on

higher prices for primary non-ferrous metal products as well as

energy and petroleum products. The gain came after an upwardly

revised 0.9% increase in March.

This follows the consumer price inflation data last week,

which showed the inflation rate slowed down to 2.7% in April and

core measures continued to ease, bringing it closer to BoC's 2%

target.

"The story pretty much remains the same, with investors

focusing on inflation and central bank action in Canada," said

Angelo Kourkafas, senior global investment strategist at Edward

Jones Investments.

Money markets currently expect two rate cuts by BoC in 2024,

while pricing in a full 25 basis points cut in July.

Industrials sector was the biggest drag for the

markets, falling 1.1% to a more than three-week low.

Energy shares rose 0.7%, tracking higher oil

prices as the prospect of OPEC+ maintaining oil supply curbs at

its June 2 meeting and hopes of strong U.S. summer fuel demand

offset concerns about higher-for-longer U.S. rates.

Investors also monitored the banks reporting earnings, with

Bank of Nova Scotia ( BNS ) posting better-than-expected

quarterly results, boosted by a rise in brokerage revenue in

Canada and mutual fund fees overseas as well as higher capital

markets income.

Scotiabank shares were up 0.1%.

Across the border, S&P 500 and the Nasdaq

opened higher as investors awaited key inflation data later in

the week that could influence expectations for the US Federal

Reserve's policy trajectory.

Meanwhile, Canada's Finance Minister Chrystia Freeland said

the federal budget presented to the Parliament last month has

created conditions for interest rates to come down.