TSX hits 5-week high as investors weigh soft-landing prospects

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

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose on Wednesday to its highest closing level in more than five weeks, led by cyclical sectors, as investors awaited U.S. inflation data that could raise prospects for the economy.

The Toronto Stock Exchange's S&P/TSX composite index ended up 126.19 points, or 0.6%, at 20,025.05, its highest closing level since Dec. 5. From its low in December, the index has climbed 4.5%.

U.S. stocks also notched strong gains as investors were optimistic ahead of U.S. consumer price index data on Thursday that could give the Federal Reserve room to dial back on its aggressive interest rate hikes.

Some traders feel confident "that either we get a soft landing (for the economy) or a not too bad recession," Edward Moya, senior market analyst, at OANDA said in a note.

Sectors that tend to particularly benefit from an improved economic outlook were among the standouts, including a 1% gain for industrials and a 1.1% advance for consumer discretionary.

Heavily weighted financials rose 0.7% and energy ended 0.5% higher as the price of oil settled up 3.05% at $77.41 a barrel.

The materials sector gave back some of its recent rally, dipping 0.3%.

It was weighed by a decline of 1% for the shares of Barrick Gold Corp after the company said it signed new joint venture deals with Saudi Arabian Mining Co (Ma'aden), the Gulf's largest miner, for two copper exploration projects.

(Reporting by Fergal Smith; Additional reporting by Shristi Achar A and Johann M Cherian in Bengaluru; editing by Jonathan Oatis)