• TSX ends down 1.7% at 29,888.82
• Inflation rate increases to 2.4% in September
• BoC rate cut chances edge lower
• Materials group drops 8.2% as gold slides

TORONTO, Oct 21 (Reuters) - Canada's main stock index posted its biggest decline since April on Tuesday as gold prices pulled back sharply and hotter-than-expected inflation data reduced bets on a Bank of Canada interest rate cut.

The S&P/TSX composite index (.GSPTSE) , opens new tab ended down 527.62 points, or 1.7%, at 29,888.82, its lowest closing level since October 10. Still, the index has advanced 20.9% since the start of the year.

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Canada's annual inflation rate increased to 2.4% in September, eclipsing the 2.3% pace that analysts expected and up from 1.9% in August.

"Certainly the inflation number, higher than expected, is definitely driving part of that (decline in stocks) because it lowers the probability of an interest rate cut." said Lorne Steinberg, president, Lorne Steinberg Wealth Management Inc.

Chances of a Bank of Canada interest rate cut at an October 29 policy decision dipped to 80% from 86% before the inflation report, swap market data showed. Last month, the central bank lowered its benchmark rate to a three-year low of 2.50%

"Part of it just feels like a bit of a pullback from an absolutely spectacular run ... Of course, the price of gold is down so the gold stocks are getting hammered today," Steinberg said.

Gold fell 5.5% as investors booked profits. Expectations of U.S. interest rate cuts and sustained safe-haven demand drove the metal to a record high in the previous session.

The materials group (.GSPTTMT) , opens new tab, which includes metal mining shares, fell 8.2%, with shares of Lundin Gold (LUG.TO) , opens new tab down 14.8%.

Technology lost 1.3%, weighed by declines for electronic equipment firm Celestica (CLS.TO) , opens new tab and e-commerce company Shopify (SHOP.TO) , opens new tab.

A months-long fight for control of Canada's last pure-play oil sands company took a fresh twist as MEG EnergyMEG.TO , opens new tab postponed a scheduled meeting at which shareholders were set to vote on its proposed takeover by Cenovus Energy CVE.TO , opens new tab.

Shares of MEG lost 1% and Cenovus ended 2.1% lower.

https://www.reuters.com/business/tsx-futures-dip-commodity-prices-weaken-eyes-cpi-data-2025-10-21/