By Fergal Smith
TORONTO (Reuters) - Canada's main stock index on Tuesday rose to its highest closing level in four weeks as recent weakness in the U.S. dollar helped lure investors to gold mining shares, with the index recouping an earlier decline.
The Toronto Stock Exchange's S&P/TSX composite index ended up 41.79 points, or 0.2%, at 19,898.86, its highest closing level since Dec. 13.
"If you think the U.S. is closer to the end of rate hikes than other parts of the globe, (then) that thought process has created weakness in the U.S. dollar which has helped Canadian commodity stocks - gold most noticeably in the last couple of months," said Matt Skipp, president of SW8 Asset Management.
U.S. stocks also ended higher on relief that Federal Reserve Chair Jerome Powell refrained in a speech from commenting on interest rate policy.
The materials group, which includes precious and base metals miners and fertilizer companies, added 0.9%, as gold prices rose. Since November, the group is up 23%.
Technology rose 0.6% and heavily weighted financials ended 0.4% higher.
The Fed has raised interest rates aggressively to tackle soaring inflation, rattling equity markets globally in 2022. The Bank of Canada has also hiked at a rapid pace.
Central bank tightening may work with more of a lag than investors expect, Skipp said, adding "we might see a stronger first half of the year (for the market), then a much weaker second half of the year."
Among the strongest performers on Tuesday was Nuvei Corp. Shares of the electronic payment technology solutions company advanced 8.8%, adding to their gains on Monday when the company agreed to a deal that could boost its operations in the United States.
The energy group was a drag, falling 0.5%, even as oil settled 0.7% higher at $75.12 a barrel.
(Reporting by Fergal Smith; Additional reporting by Shristi Achar A and Johann M Cherian in Bengaluru; Editing by Sandra Maler)