TSX ends higher on energy rally as investors await earnings, Fed rate hike

FILE PHOTO: A sign board displaying Toronto Stock Exchange stock information is seen in Toronto

By Nichola Saminather

(Reuters) - A rally in oil stocks lifted Canada's main stock index to a higher close on Monday, while investors braced for a slew of earnings reports as well as another big interest rate hike from the U.S. Federal Reserve this week.

The Toronto Stock Exchange's S&P/TSX composite index closed up 121.56 points, or 0.64%, at 19,104.48.

The energy sector was the biggest gainer on the Canadian index, climbing 3.55% as crude prices rose 2.2%, with investors trying to balance supply fears with expectations that a rise in U.S. interest rates would weaken fuel demand. [O/R]

Energy firms Secure Energy Services, Spartan Delta Corp and Nuvista Energy were the best performers in Canada.

"The price of crude is up and that's helping," said Colin Cieszynski, chief market strategist at SIA Wealth Management.

Materials stocks were among the biggest decliners, which Cieszynski attributed to a lower gold price as well as disappointing earnings from the world's largest gold miner, Newmont Corp.

Spot gold fell 0.5%, reflecting market expectations of another 75 basis-point interest rate hike from the Federal Reserve on Wednesday. While gold is considered a hedge against inflation, rising rates reduce the appeal of the non-yielding asset.

In resources-heavy Canada, investors are looking for results from miners including Teck Resources and First Quantum Minerals and energy companies including Enbridge and Imperial Oil, this week.

Mega-cap U.S. firms such as Apple Inc, Amazon.com Inc, Alphabet Inc, Microsoft Corp and Meta Platforms Inc are also scheduled to post earnings this week, and could shed light into global growth.

Investors have been worried that rising prices and central banks' attempt to control it could squeeze growth as economies reel from the fallout of the Russia-Ukraine war. Canada's main index has lost almost 10% so far this year.

(Reporting by Nichola Saminather in Toronto; Additional reporting by Susan Mathew in Bengaluru; Editing by Matthew Lewis)