* TSX up 86.41 points, or 0.75 percent, at 11,629.88
* Materials lead TSX higher as commodities rise
* Seven of TSX’s 10 main groups higher (Adds details, quote)
By Jennifer Kwan
TORONTO, July 20 (Reuters) - Toronto’s main stock index ended higher on Tuesday as commodity prices rose on renewed optimism for China’s economic strength, which helped boost the TSX’s heavily weighted resource issues.
The TSX’s materials sector, up 1.5 percent, led the rally [GOL/] [MET/L], with Barrick Gold (ABX.TO) up 0.7 percent at C$43.72, Potash Corp of Saskatchewan POT.TO up 1.6 percent at C$102.54 and Teck Resources TCKb.TO ahead 3.7 percent at C$34.31.
Market observers said the TSX was influenced by the strength in the Shanghai composite index .SSEC, which rose 2 percent to its highest close in three weeks, buoyed by property stocks, as investors gained confidence that Beijing’s property policy would hold steady for the rest of the year after a series of tightening steps. [MKTS/GLOB]
“That’s very positive for commodity markets and, by extension, the TSX composite,” said Fergal Smith, managing market strategist at Action Economics.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished the day up 86.41 points, or 0.75 percent, at 11,629.88, with seven of its 10 main groups higher.
Like U.S. stocks, much of the TSX’s rally came late in the day as some market analysts said the late buying was driven in part by speculation that the Federal Reserve would take additional policy steps to spur growth after dropping rates to near zero. [.N]
Firm oil prices also helped boost the resource-laden index, with the energy sector gaining 1.1 percent. Suncor Energy (SU.TO) climbed 1.8 percent to C$33.13, while Encana Corp (ECA.TO) rose 2.2 percent to C$34.49. [O/R]
The blue chip S&P/TSX 60 index .TSE60 closed 5.12 points higher, or 0.76 percent, at 681.76.
Gold futures rebounded on technical buying, as well as on broader worries about the pace of economic recovery in the United States, fueled by another weak housing report. [GOL/]
Elsewhere, the Bank of Canada raised its key interest rate, as expected, but cautioned that the domestic and global economic recovery would be slower than previously expected. [ID:nN20251478] [ID:nN20190202]
Rick Meslin, head of Canadian equities at UBS, said the central bank’s adjustments to its growth outlook affirmed market concerns.
“It’s almost like people know (the economy) is slowing down and the Bank of Canada confirmed it, but it’s OK, though, it wasn’t worse than what they thought so it’s almost kind of like a relief rally,” said Meslin.
In individual company news, Bombardier Inc (BBDb.TO) jumped 5 percent to C$4.65 after the plane and train maker said it won orders for 10 business jets in two separate deals worth a combined US$490 million. [ID:nN20244669]
Air Canada ACa.TO ACb.TO class A shares soared 13.1 percent to close at C$2.16 after the country’s biggest airline posted stronger than expected quarterly earnings and raised its full-year forecasts.
$1=$1.04 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson