By Fergal Smith
(Reuters) -Canada’s main stock index rose on Tuesday, tracking gains on Wall Street, as oil prices climbed and investors rushed to increase their exposure to stocks after comments by central bankers eased their worries about the interest rate outlook.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 96.08 points, or 0.5%, at 20,725.00, moving back in reach of its highest closing level in nearly eight months which it notched last Tuesday at 20,767.38.
Major U.S. benchmarks, including the S&P 500, also closed higher as comments from Federal Reserve Chair Jerome Powell fed investor hopes for less aggressive monetary policy.
“It feels like the TSX is following the move higher in the S&P 500,” said Greg Taylor, portfolio manager at Purpose Investments.
“A lot of investors came into the year underexposed and defensive, and things seem to be getting better faster than everyone thought. It is causing people to cover and try and get reinvested and that’s causing a mini-melt up.”
Bank of Canada Governor Tiff Macklem also spoke, saying that no further interest rate hikes will be needed if, as expected, the economy stalls and inflation comes down.
The energy sector, which accounts for about 19% of the TSX’s weighting, rose 2.8% as the price of oil settled 4.1% higher at $77.14 a barrel.
The materials group, which includes precious and base metals miners and fertilizer companies, added 0.8%. It was helped by a 9.9% jump in the shares of Lithium Americas Corp after a favorable U.S. court ruling on the Thacker Pass lithium mine project.
First Quantum Minerals Ltd shares clawed back most of the previous day’s decline, rising 7.3%, and financials advanced 0.9%.
(Reporting by Fergal Smith; Additional reporting by Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by Shailesh Kuber and Jonathan Oatis)