The Toronto Stock Exchange's main index ended higher for a third straight session on Friday, led by big rises in resources issues, as tame US economic data eased worries about inflation. The S&P/TSX composite index closed up 135.42 points, or 0.97 percent, at 14.137.41, just shy of its record closing high of 14,146.74 set earlier this month.
The benchmark index is up 2.5 percent on the week, and 0.6 percent so far this month. "Fears of inflation seem to have subsided pretty quickly," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. "We've also had a rally in the bond market so that's really spilled over into the equities market."
The market rally was largely driven by the latest US consumer price data, which showed that core prices rose only 0.1 percent in May, below a forecast 0.2 percent rise, and down from 0.2 percent in April. The tame core price figure reassured investors that US inflation remains moderate.
"A lot of the economic numbers are coming up and showing the fears of a slowdown are over-exaggerated," said John Ing, president of Maison Placements Canada. "It's happy days." All 10 of the TSX index's main groups were higher, led by a 1.6 percent rise in the resource-heavy materials sector and a 1.1 percent gain in the influential energy group, which together make up more than 40 percent of the market's weight.
US crude oil was up 35 cents at $68 a barrel on worries over low US fuel supplies and tension in the Middle East. EnCana Corp was up 93 Canadian cents, or 1.3 percent, at C$70.21, while Petro-Canada gained C$1.33, or 2.4 percent, at C$56.16.
Firm metals prices gave miners a boost, with Inmet Mining up C$2.37, or 2.9 percent, at C$84.50, while First Quantum Minerals added C$2.29, or 2.4 percent, to C$96.96.
Elsewhere, Western Oil Sands Inc jumped C$2.41, or 6.8 percent, to C$37.91 after a newsletter reported Total SA may bid for the company, which is known for its stake in the Athabasca Oil Sands Project. Cameco Corp gained C$2.19, or 3.8 percent, to C$59.46 after a union spokesman said workers at the company's Zircatec uranium fuel bundles facilities in southern Ontario had authorised a strike mandate if the two sides are unable to reach a new contract.
On the downside, Tembec Inc dipped 8 Canadian cents, or 5 percent, to C$1.45 after the forest products company said it will close several sawmills and reduce shifts at others, as it struggles with a high Canadian dollar as well as lower demand and prices for lumber. Market volume was a hefty 498 million shares worth C$11 billion. Advancers easily outpaced decliners 1,003 to 593.