(Updates prices, adds analyst comments)
By Amal S
June 22 (Reuters) - Canada's main stock index fell on Wednesday after energy shares plunged on lower crude prices and as hotter-than-expected domestic inflation data fueled worries about aggressive interest rate hikes.
At 9:41 a.m. ET (1341 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 366.36 points, or 1.9%, at 18,890.93.
The energy sector fell 6.5% after oil prices tumbled on news of a plan by U.S. President Joe Biden to cut fuel costs for drivers amid concerns over a potential economic recession.
Leading declines on the TSX, Baytex Energy, Secure Energy Services, MEG Energy fell between 7.8% and 8.4%.
Canada's annual inflation rate accelerated to 7.7% in May, the highest since January 1983, on gasoline prices, as well as services like hotels and restaurants, Statistics Canada said.
Analysts polled by Reuters had expected the annual rate to rise to 7.4% in May from 6.8% in April.
"In such a scenario, it is likely that the Bank of Canada will resort to boosting its interest rates further up, possibly by about 75 basis points in its upcoming policy meeting in an effort to rein in inflation," said Kunal Sawhney, chief executive officer of Kalkine Group.
The risk of inflation becoming entrenched in Canada's economy is growing, say analysts, as surging prices for gas and other highly visible consumer items undercut efforts by the Bank of Canada to keep expectations for price increases in check.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 2.3% as copper prices slumped to their lowest level in over a year.
Bombardier Inc workers on a key program for the Canadian business jet maker will decide on Wednesday whether to accept a new contract offer or walk off the job. Shares fell 1.5% in early trading.
(Reporting by Amal S in Bengaluru; Editing by Amy Caren Daniel)