The annual inflation rate held steady at 0.7% in March, unchanged from one month earlier, Statistics Canada reported today.

The 12-month increase in the Consumer Price Index in March was identical to the 0.7% increase registered in February, StatsCan said.

Excluding energy prices, the 12-month change in March would have been 1.2%.

The All-Items Index excluding the eight most volatile components, as defined by the Bank of Canada, rose 1.3% from March 2003 to March 2004, compared with 1.1% in February.

In separate release, StatsCan said foreign investors reduced their holdings of Canadian securities by $7.6 billion in February. The February slide more than reversed the large increase in January, the agency said.

Meanwhile, Canadian investors increased their holdings of foreign securities, adding bonds through secondary market transactions and stocks via a corporate takeover.

Stocks are set to trade higher, with a flood of first-quarter earnings reports on tap. Investors also are awaiting the first of two days of testimony from Federal Reserve Chairman Alan Greenspan.

In this morning’s earnings news, Pfizer Inc. said its net income dropped 50% as the world’s largest drugmaker continues to take charges related to last year’s acquisition of Pharmacia Corp. But the results still beat analysts’ expectations and revenues jumped 47%.

Sprint’s profit fell 87%, despite a 5.8% revenue gain, after a huge one-time benefit in the year-earlier quarter. The company’s wireless division saw sales jump 17%.

In M&A news, Sleeman Breweries Ltd. is putting $36.5 million on the table to buy Quebec beermaker Unibroue Inc.

Overnight in Asia, the Nikkei rose 188.05 points, or 1.6%, to 11,952.26.

In Hong Kong, the key Hang Seng fell 55.63 points to 12,394.37.

On Monday, the S&P/TSX composite index finished ahead 7.47 points at 8,702.82.

The Canadian Venture Exchange fell 16.27 points to 1,800.79.

South of the border, U.S. tech stocks rose after four consecutive losing sessions left prices attractive. The tech-heavy Nasdaq composite index ended up 24.66 points, or 1.24%, at 2,020.40. The S& P 500 added a mere 1.23 points to 1,135.84. The Dow Jones industrial average slid 14.12 points to 10,437.85.