TORONTO (Reuters) - Canada's main stock index rose on Tuesday to its highest level in nearly three weeks as robust commodity prices lifted shares of energy and mining companies, overcoming a decline in Alimentation Couche-Tard (ATDb.TO).
A strong start to the U.S. earnings season, which kicked off with Alcoa's robust profit report on Monday, also boosted investor sentiment.
The gains were capped as Couche-Tard, the convenience store and gasoline station operator, fell 5.6 percent after its fourth-quarter results missed market expectations.
Resource stocks, which have played a major role in keeping the Toronto market in negative territory for the year, were the session highlight.
Oil prices climbed in choppy trade, while the price of gold hit a one-week high on demand for the physical commodity. <O/R> <GOL/>
"Clearly resources are rebounding off the bottom," said Irwin Michael, portfolio manager at ABC Funds.
Energy shares in particular are trading at very attractive valuations and haven't mirrored the recent rally in the price of oil, he said.
"There is a bit of a disconnect between the oil price and oil and gas public companies," added Michael, who is "overweight" on energy stocks.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 88.22 points, or 0.72 percent, at 12,297.09, after reaching 12,298.67, its highest since June 19.
The market has been weighing the benefits of improved economic data, such as Friday's positive U.S. jobs report, against the likelihood of the U.S. Federal Reserve starting to pull back from its bond buying later this year.
"We're seeing a split focus, where investors are focused on equity markets, as well as interest rates and returns out of the bond markets," said Craig Fehr, market strategist at Edward Jones. "Investors are taking a bit of a pause trying to digest better data against the prospect of less stimulus."
Five of the 10 main sectors on the index were higher. Financials, the index's most heavily weighted sector, climbed 0.5 percent.
The materials sector, which includes mining stocks, was the top gainer, adding 1.7 percent. Miner Teck Resources Ltd TCKb.TO jumped 5.7 percent to C$22.39.
Investors also focused on BlackBerry's (BB.TO) annual general meeting, where it faced some tough questions about its future, after a recent quarterly report fueled a huge selloff. The stock advanced 1 percent to C$10.20.
Editing by Kenneth Barry and Leslie Adler