Canadian stocks lost early momentum at the end of the day on Tuesday even as commodity prices rose sharply in the wake of data indicating that China is managing to avoid an abrupt economic slowdown.

The S&P/TSX Composite Index was down 25.77 points, or 0.21 percent, at 12,232.83 while the S&P/TSX Venture Composite Index lost 1.21 points, or 0.08 percent, at 1,537.72.

The Bank of Canada announced on Tuesday that it was going to leave its key rate unchanged at one percent. The bank observed that the Canadian economy did better than expected in the last half of 2011, but it expects the pace of growth going forward to be more modest than previously forecast, largely due to deteriorating economic performance outside of Canada.

China reported its economy grew 8.9 percent in the final quarter of last year, down from 9.1 percent in the third quarter and the slowest in two and half years. But markets had been expecting growth to come in at 8.7 percent and the data also showed that December retail sales and factory output accelerated.

The Chinese government moved to slow its economy last year to deal with high inflation. But leaders have recently started easing lending to encourage growth in the face of plunging export demand from the U.S. and Europe.

There have been worries that Chinese officials would be unable to engineer a soft landing for the economy.

A growing Chinese economy has been an important source of support for a struggling global economy and, in particular, has boosted prices for oil and metals and in turn energy and mining stocks on the resource-heavy Canadian stock market.

The Chinese data sent commodity prices up sharply with the February crude oil contract on the New York Mercantile Exchange up 2.24 dollars to 100.94 U.S. dollars a barrel, taking the energy sector up 0.45 percent. Suncor Energy was up 32 cents to 33.26 Canadian dollars.

The base metals and mining sector gained 0.42 percent as March copper gained 8.80 cents to 3.73 U.S. dollars a pound. Teck Resources climbed 20 cents to 39.85 Canadian dollars.

The gold sector was the weakest component even while February gold bullion climbed 21.60 dollars to 1,652.40 U.S. dollars an ounce. Kinross Gold Corp. was the biggest loser. Barrick Gold Corp. lost more than 1 dollar to 48.75 Canadian dollars.

Meanwhile, fears about Europe's debt crisis still hang in the market. Greece is struggling to reach a deal with private creditors to get them to accept a reduction in the value of their holdings of Greek debt. Without a deal with its private creditors, Greece has been told it won't get the next tranche of money due from its first bailout.

If it doesn't get that money, Greece would be unable to pay the big bond redemption in March, potentially triggering mayhem in financial markets.

Economically speaking, Statistics Canada reported this morning that foreign investment in Canadian securities strengthened in November with non-residents adding 15.0 billion dollars to their holdings, the largest such inflow of funds since May.

On the currency front, the Canadian dollar rose 0.71 cents to 98.46 U.S. cents after the Bank of Canada announced it was keeping its rate at 1 percent for another two months and raised its prediction for 2012 economic growth slightly to 2 percent. One U.S. dollar was buying 1.0160 Canadian dollars at 5 p.m. local time (2200 GMT) on Tuesday, compared with one U.S. dollar purchasing 1.0230 Canadian dollars on Monday.