By Fergal Smith
(Reuters) -Canada's main stock index rose on Tuesday, helped by gains for industrial and financial shares, as investors grew more optimistic about the outlook for the market despite a setback in the previous session.
The Toronto Stock Exchange's S&P/TSX composite index ended up 85.85 points, or 0.4%, at 20,957.74. On Monday, the index posted its biggest decline in nearly three weeks as Federal Reserve Chair Jerome Powell tempered expectations for an early start to interest rate cuts.
"We are inching forward towards more optimism and I think that is being reflected in the market," said Philip Petursson, chief investment strategist at IG Wealth Management. "So it might be one step back but two steps forward."
The U.S. benchmark S&P 500 also closed higher. Recent economic data and lower long-term borrowing costs since October have supported investor hopes of a soft landing for the economy.
Industrials rose 0.7% and heavily weighted financials were up 0.6%. The energy sector rallied 0.7% as the price of oil settled 0.7% higher at $73.31 a barrel.
Gains for energy were led by Precision Drilling Corp. Its shares rose 5.3% after the company reported its fourth-quarter results.
The materials group, which includes which includes precious and base metals miners and fertilizer companies, added 0.5% as the price of gold rose.
Technology was the only major sector to end lower, falling 0.4%.
(Reporting by Fergal Smith in Toronto ; Editing by Sandra Malerand Purvi Agarwal in Bengaluru; Editing by Shweta Agarwal, Tasim Zahid, Sandra Maler and Deepa Babington)
