TORONTO (Reuters) - Canada’s main stock index posted a small gain on Monday, helped by strength in natural resource shares as they benefited from higher commodity prices.
Commodities have been boosted by weakness in the U.S. dollar .DXY since a statement by the Federal Reserve last week that signaled a softer view on raising U.S. interest rates than some in the market had expected. Many commodities are priced in U.S. dollars, and a weaker dollar makes them more affordable to holders of other currencies.
Rebounding commodities helped the resource-heavy Toronto stock market’s benchmark index record a 1.4 percent gain last week. On Monday, U.S. crude oil CLc1 jumped 1.7 percent, copper CMCU3 added 1.2 percent and bullion XAU= gained 0.5 percent.
“The overall U.S. dollar weakness is opening the door for a rally in the commodity sectors,” said Youssef Zohny, portfolio manager at StennerZohny Investment Partners+ of Richardson GMP Ltd, which manages about C$27 billion in assets.
“Materials, and in particular precious metals, are very attractive here, given some of the relative valuations that we’re seeing,” he added.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 14.80 points, or 0.1 percent, at 14,957.21. Six of the 10 main sectors on the index were higher.
The materials sector, which includes mining stocks, was up 0.9 percent. Teck Resources Ltd TCKb.TO gained 4.6 percent to C$19.75, and First Quantum Minerals Ltd (FM.TO) was up 4.2 percent, at C$15.64. Barrick Gold Corp (ABX.TO) jumped 1.8 percent to C$14.27.
Editing by Peter Galloway and James Dalgleish