June 7 (Reuters) - Canadian stocks pared gains on Wednesday after the country's central bank's surprise decision to raise its benchmark interest rates, while a boost from energy shares helped keep the main stock index afloat.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) was up 0.05%, after rising as much as 0.4% to 20,149.95 ahead of the rate decision.
The Bank of Canada (BoC) hiked the key rate to 4.75%, the highest level in 22 years, on increasing concerns that inflation could get stuck significantly above its 2% target.
Canadian money markets see a near-50% chance of another rate hike in July, fully pricing in further tightening by September.
BOCWATCHInvestors are now on the lookout for inflation data out of the U.S. and the Federal Reserve's policy meeting next week.
Persons:
Diana Avigdor, Ankika Biswas, Shashwat Chauhan, Shilpi Majumdar
Organizations:
Toronto Stock, Bank of Canada, BoC, Capital Management, BOCWATCH, Energy, North West Company, Thomson
Locations:
China, Bengaluru