Toronto market gains as investors embrace energy shares

·1 min read
FILE PHOTO: A sign board displaying Toronto Stock Exchange stock information is seen in Toronto

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose on Thursday, rebounding from a two-week low the day before, as optimism that global economic recovery will continue supported the outlook for resource and other cyclical stocks.

The Toronto Stock Exchange's S&P/TSX composite index ended up 32.54 points, or 0.15%, at 21,072.02, after Wednesday's close was the lowest since Dec. 21.

The gain came as data showed Canadian exports climbing to a record high, helped by the seventh straight monthly increase in energy exports.

"I am positive on the resources ... global growth is still strong," said Steve Palmer, founding partner and chief investment officer at AlphaNorth Asset Management.

"If the resources are strong, it's a good sign the Canadian market will perform."

Energy, financials and other cyclical sectors, which tend to particularly benefit from a pickup in economic growth, account for more than 70% of the Toronto market.

Energy advanced 3%, helped by higher oil prices, while financials ended 0.8% higher.

U.S. crude oil futures settled 2.1% higher at $79.46 a barrel, but gold fell more than 1% after minutes of the Federal Reserve's latest meeting on Wednesday signaled the possibility of faster-than-expected U.S. interest rate hikes.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 2.7%, while technology extended this week's decline, falling 1.2%.

Some of the selling of technology shares this week could be linked to tax-planning purposes.

"People have waited to defer the capital gains to 2022, so they held off selling the winners," Palmer said.

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Jonathan Oatis)

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