TORONTO: Canada's main stock index rallied on Wednesday, led by a nearly 5 percent surge in energy stocks and broad gains in most other key sectors including the hefty financials group.
Oil and gas names jumped 4.8 percent, moving in step with US crude prices, which rose some 5.6 percent late in the morning on a drawdown in US stockpiles, higher gasoline prices and inflation data that dampened the chances of an interest rate hike by the Federal Reserve this week.
"There's a sense that the Fed won't increase rates tomorrow. We'll have to see if that's the case," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
"If that's the mentality, then the US dollar may come off a bit more and commodities may rally some more.
I don't know how sustainable that is, but that seems to be what's going on currently."
The most influential positive movers on the index were Suncor Energy Inc, which bounced 3.8 percent to C$34.68, and Canadian Natural Resources, which jumped 5.3 percent to C$27.72.
The financials group, including Canada's largest banks and which have great exposure to the energy sector, climbed more than 1.4 percent.
Royal Bank of Canada rose 1.3 percent to C$74.13, and Toronto Dominion Bank advanced 1.3 percent to C$52.78.
At 11:25 a.m. EDT (1525 GMT), the Toronto Stock Exchange's S&P/TSX composite index rose 238.82 points, or 1.77 percent, to 13,701.53.
Nine of the index's 10 main groups were in positive territory.
The materials group jumped 3.3 percent. Combined with financials and energy, the three sectors make up roughly two-thirds of the index's weight.
Advancing issues outnumbered declining ones on the TSX by 232 to 13, for a 17.85-to-1 ratio on the upside.
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