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June 26 (Reuters) - Canada's main stock index slid on Wednesday, hurt by rise in yields after receding July bets for an interest-rate cut by the Bank of Canada, but gains in materials shares kept the losses in check.
At 10:48 a.m. ET (14:48 GMT), the Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) was down 71.92 points, or 0.33%, at 21,716.56.
Weighing on the markets, Canadian 10-year benchmark yield rose 8 basis points and was last at 3.471%, a day after the domestic inflation surprisingly came in hotter than expected on Tuesday.
"The inflation report gave a little bit more of a knee-jerk reaction. Eventually the narrative is going to change, but it is still focused on getting back to the 2% for inflation," said Benjamin Jang, portfolio manager at Nicola Wealth.
Traders now see the Canadian central bank holding rates steady in July, while anticipating roughly two 25-basis-point rate cuts later this year.
BofA Securities however expects a cut in July, as it anticipates a fall in July CPI data which is expected to be released right before BoC' monetary policy meeting.
Most sectors were trading in the red, except industrials (.GSPTTIN) and materials (.GSPTTMT), which rose 0.1% and 0.9%, respectively.
Gold prices were in focus after slipping 1% to their lowest level in more than two weeks, weighed down by a stronger dollar and higher bond yields, while traders looked forward to U.S. inflation data due later this week.
On Wall Street, the main indexes also slipped as semiconductor and megacap stocks gave back on premarket gains, while investors awaited key inflation data later in the week.
Among individual stocks, the Onex Corp- (ONEX.TO) backed WestJet Airlines said a union representing its maintenance engineers rejected its new offer and served a second strike notice. The company rose by 0.6% in early trading.
