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Canadian stock market up despite lower inflation rate

Xinhua, December 23, 2016 Adjust font size:

Canada's main stock market in Toronto finished up for a sixth straight session on Thursday despite Statistics Canada reporting a 0.4 percent month-to-month decline in Consumer Price Index (CPI) during November.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite gained 29.34 points, or 0.19 percent, to finish the day at 15,335.23 points. Four of the ten sub-sectors ended the day in positive territory.

Earlier in the day, Canada's national statistics agency revealed that the year-over-year CPI had declined from 1.5 percent in October to 1.2 percent, falling further than the market's expectation of 1.4 percent.

The categories that contributed most to November's monthly decline were gasoline (4.3 percent), clothing and footwear (2.1 percent), and energy (2.3 percent).

Dawn Desjardins, Deputy Chief Economist at Royal Bank of Canada believes that with the recent upswing in energy prices, the inflation rate will bounce back in 2017.

"Canada's headline inflation rate pulled back in November which is likely to prove to be a temporary respite with energy prices projected to rise in the year ahead," said Desjardins in a report.

She forecasts the rate to be higher than the 2.0 percent budgeted by the central bank in October, but does not expect it to result in a change to the overnight interest rate.

During Thursday's session, Telecommunications group saw the biggest movement, rising 0.91 percent after Canadian Radio-television and Telecommunications Commission (CRTC) declared high speed internet to be a basic service late Wednesday.

The regulatory body plans to reduce the number of Canadian households without access to high speed internet from two million to zero in the next 10 to 15 years.

Shares of the country's two largest internet service providers gained on the day. BCE Inc. shares jumped 1.18 percent to 58.14 Canadian dollars (43.08 U.S. dollars), while rival Rogers Communication gained 1.09 percent to 52.06 Canadian dollars (38.58 U.S. dollars) a share.

Other groups to advance on the day included Health Care (0.81 percent), Utilities (0.67 percent), and Energy (0.23 percent).

Energy moved up slightly as price Brent crude oil delivered in February in London gained 23 cents to 54.71 U.S. dollars a barrel. Shares of Calgary-based Suncor Energy Inc. rose 1.07 percent to 44.44 Canadian dollars (32.93 U.S. dollars a share).

Groups that retreated on the day saw modest declines, as Consumer Discretionary (0.15 percent), Industrials (0.10 percent), Information Technology (0.07 percent), Consumer Staples (0.05 percent), Materials (0.02 percent) and Financials (0.01 percent) all faded during the session.

The Canadian dollar retreated 0.0054 to 0.7410 U.S. dollars. Endite