Higher-than-expected inflation figures for February spooked investors Thursday. The spectre of rising interest rates sparked a broad-based selloff on the Toronto Stock Exchange.

The TSE 300 Composite Index fell 59.24 points to 7,856.20.

Rising prices for food, tobacco products and electricity pushed Canada’s annual inflation rate to 1.5% in February, Statistics Canada reported Thursday. Economists had been expecting the rate to drop to either 1.1%or 1.2%.

Overall, 13 of the TSE’s 14 sub-indices closed lower. The tech-heavy industrial products sub-index was the lone gainer.

The industrials were boosted by a 32¢ gain in Nortel Networks to $7.52.

BCE, the third biggest TSE-listed company by market capitalization, fell 78¢ to $32.47 after it reduced its earnings guidance because of a revenue shortfall at subsidiary BCE Emergis.

Anthorer loser was Natural gas produce Rio Alto Explorations. Its shares fell $3.01 to $15.22 after the company reported a big quarterly loss Wednesday.

Financial services lost almost 1% as Sun Life Financial Services gave up 81¢ to $33.86 and Clarica Insurance, which is being acquired by Sun Life, was down $1.11 to $51.03.

Laurentian Bank held its annual meeting Thursday. The bank said 2002 would be a challenging year as it faces labour difficulties and a slow economy. Laurentian shares fell 28¢ to $39.41.

Venture capital stocks fared a bit better today. The S&P/CDNX composite index closed up 3.60 points at 1,156.70. Trading was active on a volume of 34.6 million shares.

On Wall Street, blue chips managed to climb above their session lows, while tech stocks finished higher.

The Dow Jones industrial average ended with a loss of 21.73 points at 10,479.84, while the S&P 500 tacked on 1.74 points to 1153.59. The Nasdaq composite index rose 35.96 points, or almost 2%, to 1,868.83.

The U.S. consumer price index rose 0.2% in February, matching the consensus estimate. Excluding food and energy, prices increased 0.3%.

The Canadian dollar continued to make modest gains on a recent string of solid economic reports and was up 0.02¢ at US63.34¢.