04:23 PM EDT, 10/22/2024 (MT Newswires) -- Canada's largest stock market, the Toronto Stock Exchange, closed down for a second-straight session on Tuesday, ending with a small loss as traders took profits from last week's record high ahead of Wednesday's interest-rate decision from the Bank of Canada.

The S&P/TSX Composite Index closed down 6.63 points to 24,716.7. Health Care ended down 1.6%, followed by Battery Metals, down 1.5%. Declining issues outnumbered advancers 997 to 791, with 197 listings unchanged.

The drop comes ahead of Wednesday's interest-rate decision and Monetary Policy Report from the Bank of Canada (BoC), with the central bank widely expected to cut rates by 50 basis points (bp) to offer some stimulus after September inflation fell to a 1.6% annualized rate..

BMO Economics is on board with a 50bp cut. The bank said Tuesday it expects the BoC to step up the pace of easing with with the outsized reduction. It noted both inflation and the economy are weaker than the BoC expected and money markets also lean in this direction, and said "there is even loose talk of a larger move". How rare, BMO asked, is a 75-bp rate cut?

"Well," BMO said, "even during the 2020 shutdowns the Bank kept rate cuts to 50 bps, albeit rifling off three straight ones within a month. You need to go back to the financial crisis (2008) to find the last time the Bank took out the 75-bp bazooka. The big guns are usually reserved for crises and recessions, and a sub-target inflation rate and 6.5% jobless rate don't exactly meet that threshold."

In its October Canadian Macro Outlook, Rosenberg Research said the Toronto Stock Exchange "looks far more attractive" than those in the United States. Its Canadian Equity Model score at the end of September was near neutral at 45.4 while its U.S. Equity Model score was Underweight at 0.0 at the same time. The research said defensive consumer stocks were breaking out while health care also offered defensive growth and was on an uptrend.

Rosenberg added utilities were "rebounding very nicely" and that REITs will benefit from lower interest rates.

In terms of stock specific news, Dye & Durham ( DYNDF ) closed up 9.5% as it responded to a media report that it is exploring a sale after receiving takeover interest. In a statement the company confirms that it has "expanded the scope of its previously commenced strategic review process to consider additional opportunities to enhance shareholder value that may include, but are not limited to, a sale of the company, merger, divestiture of assets, or other strategic transactions."

It added: "There can be no assurance that the strategic review process will result in any transaction or other alternative, nor any assurance as to its outcome or timing. There is no timetable for completion of this process and Dye & Durham ( DYNDF ) does not intend to comment further unless and until it determines that further disclosure is necessary or appropriate."

West Texas Intermediate (WTI) crude oil closed higher for a second day on Tuesday, a day after China took further steps to stimulate its flagging economy while the Biden Administration makes another push for a ceasefire in the Middle East. WTI crude oil for November delivery closed up US$1.53 to settle at US$72.09 per barrel, while December Brent crude, the global benchmark, closed up US$1.74 to US$76.04.

Gold traded to a fresh record high for the fourth-straight session midafternoon on Tuesday as yields slipped following strong day-prior gains after Federal Reserve officials cautioned the pace of interest-rate cuts may be slower than expected. Gold for December delivery was last seen up US$20.50 to US$2,759.40 per ounce.