The Toronto market is rallying on broad-based gains

Purvi Agarwal

(Reuters) – Canada's main stock index edged higher on Monday, boosted by gains in consumer staples and financial stocks, as the market recovered from last week's broad sell-off triggered by higher-than-expected U.S. inflation data.

The Toronto Stock Exchange's S&P/TSX composite was up 40.09 points, or 0.18%, at 21,940.08 at 10:04 a.m. ET (14:04 GMT).

Financial heavyweights rose 0.6%, while consumer staples gained 1.0%.

The share of communication services increased by 0.4%. The sector was boosted by Cogeco Communications, which rose 0.6% after brokerage RBC raised its price objective on the company after first-quarter results.

Only three out of eleven sectors suffered losses. Energy stocks fell 0.8% as oil prices fell. (.TO)

“We're seeing some upside based on strong economic data (US retail sales) and hopes for lower Middle East tensions,” said Angelo Kourkafas, senior investment strategist at Edward Jones Investments.

U.S. retail sales rose more than expected in March, further evidence that the economy ended the first quarter on solid footing.

“Current economic strength suggests the Fed is in no rush to cut rates, but on the other hand, corporate profits will continue to be supported, which could extend the bull market,” he added.

Investors' focus will turn to the March reading of Canada's key consumer price index (CPI) on Tuesday to gauge inflation in the economy and adjust expectations for a Bank of Canada interest rate cut.

The data set drew attention after BoC governor Tiff Macklem said the central bank's latest decision may be open to tapering in June if the recent cooling trend in inflation persists.

(Reporting by Purvi Agarwal in Bangalore; Editing by Ravi Prakash Kumar)