Sept 18 (Reuters) – Toronto stocks faltered on Monday hurt by rate-sensitive technology shares as U.S. Treasury yields edged up, while investors keenly await inflation data this week that could offer more insight into the Bank of Canada’s (BoC) outlook for interest rates.

At 10:22 a.m. ET (1422 GMT), the Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) was down 136.5 points, or 0.66%, at 20,485.84 and was set for its worst-day in nearly two weeks.

Leading sectoral declines, technology stocks (.SPTTTK) dipped 0.8% mirroring a fall in some U.S. megacap and chip stocks as yields edged higher.

Real estate (.GSPTTRE) stocks also fell 0.6% after data showed Canadian housing starts fell 1% in August compared with previous month.

Producer prices grew by 1.3% in August from July on higher prices for energy and chemical products.

Key data focus on Tuesday will be on Canada’s annual inflation rate, which is expected to rise to 3.8% in August from 3.3% in July.

On a month-over-month basis, the consumer price index (CPI) is likely to have cooled down to 0.3% from 0.6%, as per LSEG data.

“There’s no doubt that inflation is going to continue to show a tick higher on a year-over-year basis. The question is whether the BoC will recognize that this is more (due to) base effects, or if they will feel that they need to respond to this,” said Philip Peturrson, chief investment strategist at IG Wealth Management.

Investors will also keep a eye on the U.S. Federal Reserve’s monetary policy meeting on Wednesday, where the central bank is widely expected to keep interest rates unchanged.

Shares of Bank of Montreal (BMO.TO) fell 1.1% after the third-largest Canadian lender said on Saturday it was winding down its indirect retail auto finance business and shifting focus to other areas

The broader financials index (.SPTTFS) dropped 0.6%.

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