By Fergal Smith
TORONTO (Reuters) - Canadian stocks followed their Wall Street peers higher on Tuesday as oil prices rose and after fresh evidence of easing U.S. inflation raised expectations that the Federal Reserve will slow its pace of interest rate hikes.
The Toronto Stock Exchange's S&P/TSX composite index ended up 72.97 points, or 0.4%, at 19,994.78.
Wall Street was also higher after data showed U.S. producer prices rose less than expected in October, but gains were cut after a report that Russian missiles crossed into Poland and killed two people.
"Markets are up because the PPI data confirmed what people saw in the consumer price reports from last Thursday," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
"It is a growing sense that the Fed could start to slow the pace of interest rate hikes."
The Bank of Canada has also been hiking rates. Canadian inflation data for October, due on Wednesday, could help guide expectations for further tightening from the central bank.
The Toronto market's energy sector rose 1.7% as oil settled 1.2% higher at $86.92 a barrel, boosted by news that oil supply to Hungary via the Druzhba oil pipeline has been temporarily suspended due to a fall in pressure.
Technology was also a standout, advancing 2.3%.
Halfway into November, the TSX looked set for its second straight month of gains as investors welcomed signs of decade-high inflation cooling.
"Generally speaking, the central bank hawkishness that had driven markets down earlier has backed off a little with inflation falling ... the economy in North America has held up relatively well too," Cieszynski said.
(Reporting by Fergal Smith; Additional reporting by Johann M Cherian in Bengaluru; Editing by Alistair Bell)