• TSX ends down 0.1% at 23,677.70
• Consumer staples sector falls 1.5%
• Industrials end 0.8% lower
• Energy rallies 1.5%; oil settles 1.6% higher

Sept 17 (Reuters) - Canada's main stock index ended lower on Tuesday, pressured by declines for the industrial and consumer staples sectors, as investors weighed the signal the Federal Reserve could send about the economic outlook if it opts for an oversized rate cut.

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab ended down 24.37 points, or 0.1%, at 23,677.70, its first decline in five sessions, after notching an all-time closing high on Monday.

Markets were leaning toward a half-percentage-point rate cut by the Fed, rather than a quarter-point move, at the expected start of an easing cycle on Wednesday.

"The market will be happy with a 50-basis-point cut as long as there's no indication of prolonged or deeper weakness in the economic environment than the market expects," said Kevin Headland, co-chief investment strategist at Manulife Investment Management.

The economically sensitive industrials sector fell 0.8% as railroad stocks lost ground.

The consumer staples sector was down 1.5%. It was pressured by declines for food retailers, including a drop of 3.2% for the shares of Loblaw Companies Ltd (L.TO) , opens new tab.

The Bank of Canada has already begun lowering borrowing costs, moving in 25-basis-point steps. Speculation rose that the central bank would increase the size of its cuts as domestic data showed the annual inflation rate slowing to 2% in August.

"Today's figure tilts the scales a touch toward a more aggressive path," Benjamin Reitzes, Canadian rates & macro strategist at BMO Capital Markets, said in a note.

Energy was a bright spot, rising 1.5%, as the price of oil settled 1.6% higher at $71.19 a barrel on mounting supply disruptions.

Canadian miner First Quantum Minerals (FM.TO) , opens new tab has opened a voluntary retirement scheme to workers at the Cobre Panama mine, two sources familiar with the matter told Reuters. Shares of First Quantum rose 3.8%.

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https://www.reuters.com/markets/tsx-futures-rise-bets-bigger-fed-rate-cut-2024-09-17/