TSX edges higher as consumer stocks offset energy sector weakness

By Avinash P

Canada's main stock index edged higher in choppy trading on Tuesday, as gains in consumer-related shares offset losses in energy stocks, while investors assessed U.S. economic data amid rising expectations of a Federal Reserve rate cut.

At 10:21 a.m. ET, Toronto's S&P/TSX composite index TSX was up 0.2% at 30,659.44 points. The index climbed to a 12-day high the previous session after dovish remarks by voting members on the Federal Open Market Committee, John Williams and Christopher Waller.

"We now have the markets once again rethinking what potentially may happen in the December Fed meeting, with another rate cut being the most likely scenario," said Angelo Kourkafas, investment strategist at Edward Jones Investments.

Markets are pricing in about an 82% chance of a quarter-point cut in December, according to CME's FedWatch Tool, up from less than 50% just one week ago.

On TSX, the consumer staples (.GSPTTCS) and consumer discretionary (.GSPTTCD) stocks were the standout performers on Tuesday, rising 2.3% and 1.5%, respectively.

Convenience store operator Alimentation Couche-Tard ATD jumped 4.5% after beating estimates for second-quarter profit.

Meanwhile, data on the day revealed U.S. retail sales increased at a slower pace than anticipated in September, following a period of robust growth.

"Overall, I don't think the data really changes the narrative. The consumer remains resilient, and we haven't seen the data impact the rate cut bets," Kourkafas said.

Energy shares TTEN fell 1.8% as oil prices declined on concerns of potential oversupply next year.

On the trade front, Canada and India are close to finalizing a uranium export agreement in a deal valued at about US$2.8 billion, the Globe and Mail reported on Monday.