Energy lifts TSX to fifth day of gains as U.S. inflation eases

The facade of the original Toronto Stock Exchange building is seen in Toronto

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index rose on Thursday to its highest closing level in more than five weeks, with resource shares leading the move as U.S. data raised hopes that inflation was on a sustained downward trend.

The Toronto Stock Exchange's S&P/TSX composite index ended up 186.15 points, or 0.9%, at 20,211.20, its fifth consecutive day of gains and its highest closing level since Dec. 5.

"Overall, it's a positive day for commodity markets that's helping Canada," said Colin Cieszynski, chief market strategist at SIA Wealth Management. "Investors also seem to be generally responding favorably to the U.S. inflation numbers, which show inflation is still coming down."

U.S. stocks also closed higher as data showed U.S consumer prices falling for the first time in more than 2-1/2 years in December, bolstering expectations of less aggressive interest rate hikes from the Federal Reserve.

The Toronto market's energy sector advanced 3.1% as U.S. crude oil futures settled 1.3% higher at $78.39 a barrel, helped by the U.S. inflation data and optimism over China's demand outlook.

The materials group, which includes precious and base metals miners and fertilizer companies, added 1.4% as gold rallied, approaching the $1,900 per ounce level.

Heavily-weighted financials gained nearly 1% and technology ended 0.7% higher.

Luxury fashion design house Aritzia Inc was a drag, falling 9.9% after the company reported third-quarter results.

(Reporting by Fergal Smith; Additional reporting by Shristi Achar A and Johann M Cherian in Bengaluru; Editing by David Gregorio)