TORONTO (Reuters) - Toronto’s main stock index closed more than 1 percent higher on Tuesday as a rally in oil prices lit a fire under energy shares and left the index just shy of its highest level in nearly a year.
The gain in the index’s energy sector was powered by Canadian Natural Resources, which rose 3.7 percent to C$76.64, followed by shares of Suncor Energy, up 2 percent at C$39.40.
“It’s really sort of the commodity story combined a little with the fact that markets worldwide are better,” said Levente Mady, market strategist at Union Securities in Vancouver.
“And while you can certainly say things are overbought at this point, until you see kind of a change in character in the market it’s difficult to fight city hall.”
The S&P/TSX composite index ended up 161.12 points, or 1.41 percent, at 11,585.73. That was just 28 points shy of topping the 11-month high it reached last week.
Seven of the 10 TSX sectors ended higher, with industrials, information technology and healthcare the only sectors ending in lower territory.
The TSX shrugged off data that showed Canadian retail sales unexpectedly fell 0.6 percent in July from June after two months of robust gains.
The index’s materials sector, home to gold-mining shares, was also a key driver of the market’s gain as gold prices rose to within striking distance of a recent 18-month high.
That helped boost shares of Barrick Gold Corp 2.4 percent to C$40.25, while Goldcorp rallied 1.8 percent to C$44.82.
Mady said the TSX could extend its rally into Wednesday’s session but might take a breather around mid-afternoon when the U.S. Federal Reserve’s Federal Open Market Committee makes an announcement. The Fed is widely expected to hold interest rates where they are, near zero percent.
Bombardier Inc shares helped keep the latest TSX rally in check as the company said it would make a decision within the next few weeks on production cuts in its commercial aircraft division. Bombardier ended the session down 1.7 percent at C$4.59
Editing by Peter Galloway