By Purvi Agarwal and Fergal Smith
(Reuters) -Canada’s main stock index on Thursday posted its biggest gain in two months, with resources leading broad-based gains as weaker-than-expected U.S. retail sales data raised prospects of an early start to Federal Reserve interest rate cuts.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 333.29 points, or 1.6%, at 21,222.69. It was the index’s biggest gain since Dec. 13 but stopped short of its recent 21-month high at 21,227.87.
U.S. retail sales fell by the most in 10 months in January, but economists cautioned against reading too much into the sharp drop amid frigid weather and difficulties adjusting the data for seasonal fluctuations at the start of the year.
“Today’s data are not necessarily bad news for the market,” said Angelo Kourkafas, investment strategist at Edward Jones Investments. “It implies that the exceptional strength we have seen on the consumer side is fading a bit and the Fed won’t have to worry that strong economic growth will reaccelerate inflation.”
The energy sector jumped 4.3% as the price of oil settled 1.8% higher at $78.03 a barrel and the materials group, which includes precious and base metals miners and fertilizer companies, added 2.4%.
Metal mining companies were helped by higher gold and copper prices, with Seabridge Gold surging 19.1% as it rebounded from a near four-year low.
Nine of the Toronto market’s major sectors ended higher, with heavily weighted financials adding 1.6%. Financials were helped by an 8.7% jump in the shares of Manulife Financial Corp after the insurer topped estimates for fourth-quarter results.
MTY Food Group Inc was among the worst performing stocks. Its shares tumbled 13.9% after the restaurant operator reported its fourth-quarter results.
(Reporting by Purvi Agarwal in Bengaluru and Fergal Smith in Toronto; Editing by Shilpi Majumdar and Jonathan Oatis)
