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Resource shares lift Toronto market to near 2-year high

Published 2024-03-01, 10:20 a/m
Updated 2024-03-01, 04:31 p/m
© 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 Fergal Smith

(Reuters) -Canada's main stock index climbed to a near two-year high on Friday, led by gains for resource and technology shares, as investors grew more optimistic about prospects for Federal Reserve interest rate cuts over the coming months.

The Toronto Stock Exchange's S&P/TSX composite index ended up 188.74 points, or 0.9%, at 21,552.35, its highest closing level since April 2022. For the week, the index was up 0.7%.

"We are back on that roller coaster ride of interest rate expectations driving the market," said Philip Petursson, chief investment strategist at IG Wealth Management. "Today, some of the softer data out of the United States rekindled the fire of expectation for the Fed cut being sooner rather than later."

U.S. manufacturing slumped further in February, with a measure of factory employment falling to a seven-month low amid layoffs, but there were signs activity was on the cusp of rebounding.

Higher commodity prices boosted resource shares, with gold rising 2%, copper up 0.5% and oil settling 2.2% higher at $79.97 a barrel.

"With the expectations of the Fed cutting interest rates, that's putting a little bit of downward pressure on the U.S. dollar and you get the inverse relationship of higher commodity prices," Petursson said.

The energy sector and materials, which includes which includes precious and base metals miners and fertilizer companies, both added 2%.

Uranium producers contributed to the rally, with NexGen Energy (TSX:NXE) Ltd up 9.5% and Cameco Corp (TSX:CCO) advancing 3.5%, after Reuters reported on Thursday that Canada will expedite the approval process for new nuclear projects.

© 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

The information technology sector also posted strong gains, climbing 1.5% and industrials were up 0.7%.

Shares of SNC-Lavalin Group (TSX:ATRL) Inc jumped 11.4% after the construction and engineering company reported fourth-quarter results that beat estimates.

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