Canada’s main stock index gained on Monday, tracking the upbeat sentiment in global markets on expectations of the Federal Reserve easing rate hikes and optimism over China reopening its borders.

At 1013 a.m. ET (1513 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 128.88 points, or 0.65%, at 19,943.39, nearing four-week levels.

Global markets extended gains as investors scaled back bets of aggressive Fed rate hikes after U.S. jobs data last week raised hopes that the wage-inflation spiral was showing signs of slowing.

“Markets responded favorably on Friday to news that wage inflation was starting to ease a little bit and that appears to be continuing into this morning,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

TSX gains on cooling wages, energy stocks rally

“People are speculating that the demand for resources could bounce back with China’s reopening and so that’s been helping crude oil, that’s been helping copper, and a lot of the commodity markets.”

The energy sector gained 2.4% as crude prices rose more than 2% on hopes of demand recovery as Beijing on Sunday reopened borders that have been all but shut since the start of the COVID-19 pandemic.

The materials group, which includes precious and base metals miners and fertilizer companies, rose 0.4%.

Energy and materials stocks form almost 31% of the index.

Energy stocks outperformed broader markets in 2022, tracking the sharp jump in crude prices as tight supplies amid the war in Ukraine, offset fears of weaker demand from top importer China and worries of an economic contraction.

Among stock news, Cannabis producer Tilray Brands Inc dropped 4.6% after it reported a second-quarter loss, which was at par with analyst expectations, bringing the broader healthcare index down 0.5%.

Financial services firm Canaccord Genuity Group Inc soared 28.3% after a group led by the company’s management said it would launch a takeover bid at nearly C$1.13 billion ($845 million).