TSX Falls as Canada Hits Inflation Target

Canada's main stock index closed lower on Monday due to hotter-than-expected July inflation. The TSX Composite Index fell by nearly 0.2% to close at 36,667.92 points.

The annual inflation rate accelerated to 3% in July, exceeding expectations, as renewed tensions between the US and Iran pushed up gasoline prices and travel tour costs.

Despite this, underlying inflation pressures remained contained, with the Bank of Canada's preferred CPI-trim and CPI-median measures holding near the 2% target. CIBC senior economist Andrew Grantham noted that July's core inflation measures were tame enough that the Bank of Canada should be in no rush to raise its benchmark interest rate.

Oil prices gained more than 2%, with Brent crude futures trading above $90 a barrel, while gold prices rose nearly 1% to $4,417.24 an ounce.