TSX rises for fifth day on interest rate optimism

The Toronto Stock Exchange's S&P/TSX composite index ended up 34.16 points, or 0.2 per cent, at 20,057.89, its fifth straight day of gains and its highest closing level since September 20.

The Toronto market's technology sector added 2.1 per cent, while utilities rose 1.2 per cent and heavily-weighted financials ended 0.4 per cent higher. (Image credit: Reuters)

Canada's main stock index extended its winning streak on Wednesday as optimism that interest rates have peaked boosted technology shares, while food retailers lost ground after reporting quarterly results.

The Toronto Stock Exchange's S&P/TSX composite index ended up 34.16 points, or 0.2 per cent, at 20,057.89, its fifth straight day of gains and its highest closing level since September 20.

Investors remained optimistic that borrowing costs could ease from current levels after data on Tuesday showed U.S. inflation cooling more than expected.

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"My sense is that (bond) yields are going to continue to move lower," said Mike Archibald, a portfolio manager at AGF Investments. "That's going to be good for risk and I think it is going to be constructive for technology."

Lower yields increase the attractiveness to investors of the future cash flows that technology and other high-growth companies are expected to produce.

The Toronto market's technology sector added 2.1 per cent, while utilities rose 1.2 per cent and heavily-weighted financials ended 0.4 per cent higher.

Energy was a drag, falling 1.2 per cent, as oil settled down 2 per cent at $76.66 a barrel. Oil was pressured by a bigger-than-expected rise in U.S. crude inventories and record U.S. crude production.

Consumer staples was another weak spot, falling 2.6 per cent, as investors weighed the results of major food retailers. Metro Inc shares fell 6.8 per cent and shares of Loblaw Companies Ltd (L.TO) gave back their earlier gains to end 2.2 per cent lower.

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