The Toronto Stock Exchange's S&P/TSX composite index ended up 221.63 points, or 1.05%, at 21,319.92, its highest closing level since Jan. 17, following a turbulent first month of the year for global equity markets.
"Investors have been encouraged by the fact that after all the tough talk from the central banks they didn't raise rates when they could have," said Elvis Picardo, a portfolio manager at Luft Financial, iA Private Wealth.
Last week, both the Bank of Canada and the Federal Reserve said that rates would have to rise to cool inflation but chose to leave lift-off for a future policy announcement.
"I do think that if you see big dips in the market they might continue to be bought," Picardo said.
"The TSX in particular, what's not to like? The banks are looking good. Energy is looking great."
Combined, energy and financials account for nearly half of the Toronto market's value.
The energy sector surged 3.6% as the price of oil held near seven-year highs, while financials ended up nearly 1%.
The materials group, which includes precious and base metals miners and fertilizer companies, added 1.7%, helped by gold and copper prices.
Gains for the TSX came as data showed Canada's economy climbing to above pre-pandemic levels for the first time in November.
Among stocks with the largest gains was toy manufacturer Spin Master Corp. It jumped 12.7% after reporting preliminary four-quarter revenue that was higher than estimates.
(Reporting by Fergal Smith; Editing by Marguerita Choy)
By Fergal Smith
