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(Reuters)
TORONTO (Reuters) - The Toronto Stock Exchange's main index could edge higher on Wednesday as investors cheered news that U.S. inflation rose only modestly last month.
With commodity prices muted in early trade, the resource-heavy Canadian benchmark will likely take its cue from U.S. consumer price data, which gave a boost to European stock markets and North American stock futures alike.
However, financial stocks could come under pressure after Royal Bank of Canada , Canada's biggest bank, said its upcoming quarterly results will include writedowns of about C$855 million relating to market conditions.
The inflation rate was less than expected in the United States, Canada's biggest trading partner, leaving the door open for the Federal Reserve to cut interest rates yet again.
"It's a temporary reprieve," said Carlos Leitao, chief economist at Laurentian Bank Securities in Montreal.
He said the TSX will likely rise in early trade, but warned that recent increases in gasoline prices will filter through to consumer prices in the next few months.
The TSX energy sector could cool for a second straight day on Wednesday as crude oil eased from another record high.
In the mining subsector, First Quantum Minerals said its first-quarter profit jumped 54 percent.
Meanwhile, Petaquilla Copper Ltd said Inmet Mining would take the management reins at the Petaquilla copper joint-venture in Panama, which also includes partner Teck Cominco .
The S&P/TSX composite index starts the day at 14,616.70 after dropping 49.37 points, or 0.3 percent, in the previous session. On Monday, it closed at a record high 14,666.07.
($1=$1.00 Canadian)
(Reporting by Jonathan Spicer; Editing by Scott Anderson)
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