Updates at market close
TSX ends down 0.4% at 27,823.88
Technology sector loses 1.7%
Materials group ends 1.8% lower
Canada's inflation rate eases to 1.7% in July
By Fergal Smith
TORONTO, Aug 19 (Reuters) - Canada's main index fell on Tuesday as technology and metal mining shares lost ground, but the decline was limited after domestic inflation data bolstered expectations for the Bank of Canada to cut interest rates in the coming months.
The S&P/TSX composite index .GSPTSE ended down 98.97 points, or 0.4%, at 27,823.88, remaining below the intraday record high of 28,063.73 it notched last Wednesday.
"Ever since we cracked 28,000 briefly last week, the TSX has been going sideways," said Elvis Picardo, a portfolio manager at Luft Financial, iA Private Wealth. "One really needs a new catalyst for the next leg up."
Canada's annual inflation rate eased to 1.7% in July from 1.9% in the prior month, helped by lower gasoline prices.
"There is little doubt that the Canadian economy is slowing, but the Bank of Canada clearly telegraphed that future rate cuts would be contingent on inflation," Picardo said.
Investors see a roughly 70% chance that the BoC resumes its easing campaign by October, up from 56% before the data. 0#CADIRPR
The TSX is set to extend its record-setting run this year and next as lower borrowing costs, along with potentially greater clarity on U.S. tariffs, offset expected pressure on corporate profits, a Reuters poll found.
The technology sector fell 1.7% as U.S. tech shares lost ground, and the materials group, which includes metal mining shares, was down 1.8%.
Gold XAU= and copper HGc1 prices fell, while the price of oil CLc1 settled 1.7% lower at $62.35 a barrel.
Energy .SPTTEN fell 0.8%, with shares of uranium producer Energy Fuels Inc EFR.TO down 17.5%.
Industrials .GSPTTIN were a bright spot, adding 1.1%, with shares of Air Canada AC.TO up 1.15% after unionized flight attendants reached an agreement with the carrier, ending a strike.
Real estate .GSPTTRE added 1% as bond yields fell. Canada's 10-year yield CA10YT=RR eased 4.7 basis points to 3.443%.
(Reporting by Fergal Smith and Nikhil Sharma; Editing by Shilpi Majumdar, Sahal Muhammed, Rod Nickel)
((fergal.smith@thomsonreuters.com; +1 647 480 7446))