TORONTO - The Toronto stock market was little changed Tuesday as commodity prices stepped back amid yet another move by China to dampen high inflation by raising interest rates.

The S&P/TSX composite index declined 7.3 points to 14,211.04 while the TSX Venture Exchange was off 2.69 points to 2,321.03.

The Canadian dollar was up 0.21 of a cent to 103.57 cents US.

The People's Bank of China is raising its key rate a quarter point, which lifts the one-year lending rate to 6.31 per cent and the rate for one-year bank deposits to 3.25 per cent.

The rate hike, the fourth since October, is in response to China's consumer prices rising by 4.9 per cent in February, driven by an 11 per cent jump in politically-sensitive food costs.

However, markets have usually reacted negatively in the short term to such moves to slow the Chinese economy.

That is because China has significantly helped to lift the global economy from recession and contributed to pushing the resource-heavy TSX up five per cent in the first quarter of this year.

The European Central Bank is widely expected to raise its key interest rate a quarter point on Thursday to deal with stubbornly high inflation.

Concerns about slowing demand from China helped push oil and metal prices lower.

Base metal stocks led decliners, down 0.5 per cent as the May copper contract on the New York Mercantile Exchange fell two cents to US$4.24 a pound. HudBay Minerals (TSX:HBM) declined 24 cents to $16.31.

The industrials sector was also down 0.5 per cent as Canadian National Railways (TSX:CNR) gave back 72 cents to $72.68.

The energy sector inched up 0.13 per cent while the May crude contract on the Nymex was down 53 cents to US$107.94 a barrel. Canadian Natural Resources (TSX:CNQ) rose 47 cents to $47.94.

The gold sector was ahead 0.25 per cent amid rising bullion prices with the June contract in New York up $1.50 to US$1,434.50 an ounce. Barrick Gold Corp. (TSX:ABX) faded 23 cents to $49.55.

The consumer staples sector was up 0.43 per cent with shares in Maple Leaf Foods (TSX:MFI) ahead 16 cents to $12.39.

New York markets were mainly lower as a key gauge of the U.S. service sector showed a slower pace of expansion during March.

The Dow Jones industrial average lost 14.83 points to 12,385.2.

The Nasdaq composite index rose 0.76 of a point to 2,789.95 after Texas Instruments Inc. said late Monday that it is buying chip maker National Semiconductor for US$6.5 billion. The S&P 500 index slipped 0.72 of a point to 1,332.15.

The Institute for Supply Management said that its index of the American service sector came in at 57.3, down from 59.7 in February.

The Federal Reserve will be in focus later Tuesday when the minutes to the last rate-setting meeting are published. Investors will be looking to see if there are any signs of the central bank ending its current US$600 billion monetary injection before June, and whether interest rates may start to rise sooner than the markets expect.

In corporate news, Diamond Foods Inc. is buying Procter & Gamble Co.'s Pringles chips business in a deal valued at US$1.5 billion. Diamond, whose products include Emerald nuts and Kettle Brand potato chips, said Tuesday that the transaction will more than triple the size of its snack business.

WestJet Airlines Ltd. (TSX:WJA) reported that its March passenger traffic was 13.3 per cent higher than the same month last year. Its load factor was 84.8 per cent, one percentage point better than in March 2010. WestJet's CEO says the company is pleased with the market's ability to absorb fare increases during a period when oil costs have surged as a result of unrest in Libya and other oil-producing areas. Its shares gained 20 cents to $14.89.

In Asia, Japan's benchmark Nikkei 225 dropped 1.1 per cent amid frantic and unsuccessful efforts to control a radioactive leak at a nuclear plant damaged by the March 11 monster earthquake and tsunami.

Elsewhere, South Korea's Kospi index rose 0.7 per cent and Australia's S&P/ASX 200 rose 0.3 per cent as the government signalled that it would block the Singapore stock exchange's $8.3 billion takeover bid for the Australian bourse, saying the deal is not in the national interest.

Markets in Hong Kong, mainland China and Taiwan were closed for a public holiday.

London's FTSE 100 index slipped 0.29 per cent, Frankfurt's DAX was down 0.5 per cent while the Paris CAC 40 declined 0.47 per cent.