* TSX ends up 0.4% at 21,200.06
* Posts its highest close since May 2022
* Tech rallies 1.5%
* Utilities adds 0.7%
Jan 29 (Reuters) - Canada's main stock index rose on Monday to a new 20-month high, helped by gains for the technology and utilities sectors, as bond yields declined ahead of a Federal Reserve interest reserve interest rate decision this week.
The Toronto Stock Exchange's S&P/TSX composite index ended up 74.78 points, or 0.4%, at 21,200.06, its highest closing level since May 2022.
U.S. stocks also advanced as market participants looked ahead to this week's slew of megacap earnings, economic data and the Fed's policy announcement on Wednesday.
"There's been a lot more talk recently that the Fed could lower rates in March, around the idea that the most recent U.S. inflation data shows the six-month inflation rate is actually below 2%," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth.
"So the Federal Reserve will consider lowering rates sometime soon."
The technology sector rose 1.5% and utilities was up 0.7%. The latter includes many high-dividend paying stocks that could particularly benefit from a drop in borrowing costs.
Canada's 10-year yield eased 6.3 basis points to 3.459%.
Consumer discretionary was another standout, adding 0.9%.
Energy fell nearly 1%, with the price of oil settling 1.6% lower at $76.78 a barrel as China's ailing property sector sparked demand worries. (Reporting by Fergal Smith in Toronto and Khushi Singh and Purvi Agarwal in Bengaluru; Editing by Vijay Kishore and Marguerita Choy)
