By Fergal Smith
(Reuters) -Canada’s benchmark stock index rose on Tuesday to its highest closing level in one week, helped by gains in energy and financial shares after domestic data showed consumer prices easing more than expected in February.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 135.49 points, or 0.7%, at 19,654.92, its highest closing level since March 14, preliminary data showed.
Canada’s annual inflation rate slowed more than expected in February to 5.2%, its lowest level in 13 months, backing up the Bank of Canada’s plans to hold off on further interest rates hikes.
If inflation is falling in Canada, “it’s only a matter of time for it to continue to fall in the U.S.,” said Barry Schwartz, portfolio manager at Baskin Financial Services.
Wall Street also advanced as widespread fears over liquidity in the banking sector subsided and investors turned their focus to the Federal Reserve, which has convened for its much-anticipated two-day policy meeting.
“We went into the weekend concerned about our banking system,” Schwartz said. “You can tell from the action of some of the bank stocks at least that confidence is slowly coming back.”
Heavily-weighted financials rose 1.2%, while energy added 3.2% as the price of oil settled 2.5% higher at $69.33 a barrel.
(Reporting Fergal Smith; Additional reporting by Johann M Cherian in Bengaluru; Editing by Pooja Desai and Jonathan Oatis)
