TSX notches two-week high as Fed rate outlook dominates

The facade of the original Toronto Stock Exchange building is seen in Toronto

By Fergal Smith

(Reuters) -Canada's main stock index rose on Thursday to its highest closing level in nearly two weeks, helped by gains for technology and industrial shares, as investors remained sensitive to clues on the outlook for U.S. interest rates.

The Toronto Stock Exchange's S&P/TSX composite index ended up 77.43 points, or 0.4%, at 20,337.21, its highest closing level since Feb. 17.

U.S. stocks also advanced as Treasury yields retreated from earlier highs following comments from Atlanta Federal Reserve President Raphael Bostic about his favoured path of interest rate hikes for the central bank.

"Investors are waiting for a chance to bid the markets up," said Elvis Picardo, portfolio manager at Luft Financial, iA Private Wealth.

"All we need is a bit of a pause in the hawkish rhetoric from the Fed and we are going to see a really strong day or two on the back of that."

The Toronto market's technology sector rose 1.2%, while industrials and energy were both up nearly 1%.

Helping energy, oil settled 0.6% higher and Canadian Natural Resources reported a record full-year profit. Its shares were up 1.8%.

Shares of Toronto-Dominion Bank fell 2.4% after it reported earnings. It rounded up a mixed quarter for Canada's major lenders.

"The bank earnings are middle of the ground. They are not super strong and they are not disastrous," Picardo said. "That is a source of comfort for anyone looking for a shallow recession or a mild one in Canada."

Data on Tuesday showed that Canada's economy stalled in the final three months of 2022 but likely rebounded in January.

(Reporting by Fergal Smith; additional reporting by Johann M Cherian in Bengaluru; editing by Uttaresh Venkateshwaran and Josie Kao)