Gold rally helps lift Toronto market to 6-week high

By - Reuters

By Fergal Smith

(Reuters) - Canada's main stock index rose on Thursday to its highest closing level in nearly six weeks, buoyed by strength in the shares of gold miners, while sentiment was also lifted by gains on Wall Street following signs of cooling inflation.

The Toronto Stock Exchange's S&P/TSX composite index ended up 110.17 points, or 0.5%, at 20,564.49, its fifth straight day of gains and its highest closing level since March 3.

Wall Street indexes rose as U.S. data showing moderating producer prices and a jump in weekly jobless claims supported bets the Federal Reserve could shift to easing interest rates by the end of 2023 following an expected end to its tightening cycle in the coming months.

"We've had some good inflation data recently in the U.S. and in Canada as well," said Scott Blair, chief investment officer at CWB Wealth.

On Wednesday, the Bank of Canada left its benchmark interest rate on hold at 4.50% for a second straight meeting, expecting CPI inflation to fall quickly to around 3% in the middle of this year.

The materials sector, which includes precious and base metals miners and fertilizer companies, advanced 1.6% on Thursday to its highest level since May 2022 as the price of gold rose to a one-year high.

"Gold prices are surging here as cooling PPI data and rising jobless claims bolsters Fed rate cut bets," Edward Moya, senior market analyst at OANDA, said in a note.

The rate-sensitive technology sector was also a standout, rising 0.7%, while heavily-weighted financials advanced 0.5%.

(Reporting by Fergal Smith; Additional reporting by Shristi Achar A in Bengaluru; Editing by Sriraj Kalluvila and Chris Reese)

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