TSX Struggles for Direction After BoC Decision

The S&P/TSX Composite Index hovered around the 31,250 mark on Wednesday as investors digested the Bank of Canada decision and guidance while awaiting the US Federal Reserve.

Markets expected the BoC to hold its policy rate at 2.25% after two cuts, keeping Canada on a steady hold path and lowering the odds of fresh stimulus after the Council signalled in October that the policy rate was broadly appropriate.

If inflation and activity evolve in line with the October projection the Council judges the current rate is about right to keep inflation near 2% while supporting the economy, but it stands ready to respond if the outlook changes.

Meanwhile, markets were pricing a likely 25 basis point Fed cut which softened US yields and eased a key headwind for risk assets.

Commodity producers drove the downside with miners and energy names such as Agnico Eagle and Canadian Natural sliding around 2% as gold and oil drifted lower while financials offset some losses with TD and CIBC up about 1%.