Energy, financial stocks push TSX higher as inflation cools

© Reuters. FILE PHOTO: The Art Deco facade of the original Toronto Stock Exchange building is seen on Bay Street in Toronto, Ontario, Canada January 23, 2019. REUTERS/Chris Helgren/File Photo

By Johann M Cherian

(Reuters) - Canada's benchmark stock index extended gains for a second-straight session on Tuesday to its highest in a week, helped by gains in energy and financial shares, after data showed consumer inflation in February had eased more than expected.

A Statistics Canada report showed consumer prices cooled unexpectedly in February and were also lower than the month before, aided by a drop in gas prices and shelter costs.

The Bank of Canada is expected to leave its key overnight interest rate on hold at its next meeting in April.

At 10:16 a.m. ET (14:16 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 141.81 points, or 0.73%, at 19,661.24.

"It's a nice drop in inflation. The central bank is looking for 3% inflation rate by the end of the year, so these numbers were somewhat encouraging," said Denis Taillefer, senior portfolio manager at Caldwell Investment Management.

Taillefer noted that efforts in the United States to help contain any potential financial crisis and restore confidence in the banking system also aided sentiment.

The energy sector added 2.4%, tracking higher crude oil prices, and financial stocks advanced 1.4%.

After a modest recovery earlier in the year, the TSX hit a rough patch in February and March, as investors fretted over the global financial system cracking under the weight of interest-rate hikes by major central banks around the world.

All eyes are on the U.S. Federal Reserve, which is largely expected to hike rates by 25 basis points on Wednesday.

Among stocks, First Majestic Silver (TSX:FR) Corp slumped 23.8% on suspending all mining activities at Jerritt Canyon, which accounted for about 21% of the firm's 2022 sales.

A 1.2% gain in the tech sector was aided by a 3.9% surge in BlackBerry (TSX:BB) Ltd on its mobile-device patents sale to Malikie Innovations Ltd, for up to $900 million.