Toronto market climbs to 9-day high as financials rally

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TORONTO — Canada’s main stock index rose on Thursday to its highest closing level in more than one week, lifted by gains for interest rate-sensitive financial stocks as investors weighed aggressive monetary policy tightening by global central banks.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 171.56 points, or 0.9%, at 19,413.00, its highest closing level since Aug. 30.

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Wall Street’s main indexes also posted gains as hawkish remarks from Federal Reserve Chair Jerome Powell cemented bets of a large interest rate hike by the U.S. central bank later this month.

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“Everyone’s waiting for when the Fed is going to back off from some of their aggressive policies and Powell has made it clear that he’s not going to make that pivot anytime soon,” said Greg Taylor, portfolio manager at Purpose Investments.

Meanwhile, the European Central Bank raised its benchmark lending rate by 75 basis points on Thursday, mirroring a similar increase by the Bank of Canada a day earlier.

A senior Bank of Canada official left the door open on Thursday to another oversized interest rate increase, saying the central bank continues to see front-loading as the best way to battle the fastest rising prices in nearly four decades.

The heavily weighted financials sector gained 1.6%, while the materials group, which includes precious and base metals miners and fertilizer companies, added 1.5%.

Energy rose 0.9% as oil prices clawed back some recent declines. U.S. crude oil futures settled nearly 2% higher at $83.54 a barrel.

Canada’s employment report for August, due on Friday, could offer clues on the strength of the domestic economy. (Reporting by Fergal Smith; Additional reporting by Aniruddha Ghosh in Bengaluru; Editing by Vinay Dwivedi and Lisa Shumaker)

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