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The close: TSX notches 12-day high as materials shares climb

A file photo from the TMX Broadcast Centre in downtown Toronto in 2013.

Fernando Morales/The Globe and Mail

Canada's main stock index rose to a 12-day high on Tuesday, boosted by materials companies as gold and copper prices climbed, while TransCanada Corp added to gains after winning a key approval for its Keystone XL pipeline on Monday.

The Toronto Stock Exchange's S&P/TSX composite index unofficially closed up 72.25 points, or 0.45 per cent, at 16,076.65.

All of the index's 10 main groups ended higher.

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The energy group finished flat, rising just 0.04 per cent on the day.

Cenovus Energy fell 1.7 per cent to $12.28, while both Crescent Point Energy and Tourmaline Oil dropped 1 per cent.

Meanwhile, Transcanada Corp. jumped 1.2 per cent to $64.25. Enbridge Inc. rose 2.4 per cent to $47.07.

The financials group was up 0.1 per cent, with Manulife Financial rising 0.8 per cent to $26.98 and Toronto-Dominion Bank finishing 0.6 per cent higher to $74.26.

Industrials rose 0.5 per cent, with Bombardier Inc up 1 per cent at $3.09 in heavy volume after the plane and train maker completed a debt offering and JP Morgan raised its rating on the company to "overweight.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.9 per cent.

Potash Corp of Saskatchewan finished up 1.2 per cent to $24.69.

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Major world stock markets rose and government bond yields fell on Tuesday as a combination of strong corporate profits, steady global growth and low inflation provide scant alternatives for investors other than equities.

Stocks markets from Asia to Europe to the Americas rose.

U.S. stocks jumped and the S&P 500 closed at a record high for the first time in about two weeks on Tuesday, led by gains in this year's top-performing technology sector

In Asia, the main Hang Seng index in Hong Kong and China's H-shares index posted their best day in seven weeks, while stocks in Tokyo also rose.

In Europe, Germany's benchmark DAX index rose more than 1 per cent before paring gains, MSCI's emerging markets index rose 1.44 per cent and its gauge of stocks across the globe gained 0.71 per cent.

"It's incredible," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "Certainly sentiment is pretty strong and it's widespread, both from the business community and consumers. Any economic concerns are pretty much falling by the wayside," he said.

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Corporate earnings and strong economic growth have propelled the stock rally while investors shrug off political risk. Wall Street trading volumes were low in a week marked by the U.S. Thanksgiving holiday and no major earnings or economic data scheduled.

The Dow Jones Industrial Average rose 160.36 points, or 0.68 per cent, to 23,590.69, the S&P 500 gained 16.91 points, or 0.65 per cent, to 2,599.05 and the Nasdaq Composite added 71.76 points, or 1.06 per cent, to 6,862.48

The S&P technology index rose 1.2 per cent, helped by Apple. The index has risen 38.5 per cent this year, by far more than any other sector. The S&P 500 is up 16.1 per cent for the year so far.

"Tech has been by far and away the leader, and that continues to be the case both domestically and internationally," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Healthcare shares were boosted by bullish results from medical device maker Medtronic, whose shares rose 4.8 per cent after the company reported better-than-expected results and backed its full-year forecast.

In Europe, Volkswagen was among Germany's top gainers for a second day, closing up 3.0 per cent, after the carmaker raised its mid-term outlook on Monday.

The pan-European FTSEurofirst 300 index closed up 0.45 per cent.

Chipmaker Analog Devices Inc's quarterly profit beat analysts' estimates on growth in its industrial segment and automotive business, which has seen sharp demand for sensor chips from electric and self-driving vehicles.

Goldman Sachs raised its earnings estimate for S&P 500 in 2018 and 2019 based on expectations of U.S. corporate tax reform, above-trend global and U.S. growth and slowly rising interest rates from a low base.

Investors are not worried about an unwelcome surprise acceleration of U.S. inflation that could rock a Goldilocks scenario where growth supports earnings and central banks are unlikely to act in a heavy-handed fashion, said Larry Hatheway, chief economist at GAM Investment Management in Zurich.

"There isn't right now in an investor's mind a compelling alternative to holding stocks," Mr. Hatheway said.

"We've generally seen stable-to-lower bond yields, so underneath it there does seem to be a very strong faith fundamentally that growth is fine, therefore earnings are fine but inflation is not a risk," he said.

The gap between French and German borrowing costs narrowed to its tightest since before the 2010-2012 euro zone debt crisis, as confidence in the bloc's economic prospects swelled.

The spread on 10-year French and German debt tightened to 15 basis points, a level last seen in August 2009, well before several sovereign debt crises rocked the single currency bloc and global markets.

In the United States the Treasury yield curve flattened to its lowest in a decade as investors awaited minutes from the Federal Reserve's last meeting, to be released on Wednesday.

Low inflation and global demand for yield has supported longer-dated debt. Benchmark 10-year notes were last up 2/32 in price to yield 2.3613 per cent.

The dollar turned broadly lower, moving in line with declining U.S. 10-year Treasury yields.

The dollar index fell 0.14 per cent, with the euro up 0.09 per cent to $1.1742. The Japanese yen strengthened 0.19 per cent versus the greenback at 112.44 per dollar.

U.S. gold futures for December delivery settled up $6.40 at $1,281.70 per ounce.

Oil edged up on Tuesday, supported by expectations that OPEC and other producing countries next week would extend output cuts, but signs of higher U.S. crude output kept prices under pressure.

"Geopolitical tensions in the Middle East and a deteriorating macroeconomic picture in Venezuela will remain supportive of oil prices in the run-up to the November OPEC meeting," said Abhishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics in London.

"However, persistently high oil production in the United States will be the predominant bearish factor limiting gains in oil prices," Kumar noted.

Brent futures rose 35 cents, or 0.6 per cent, to settle at $62.57 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 41 cents, or 0.7 per cent, to settle at $56.83 per barrel.

The American Petroleum Institute (API), an industry trade group, was due to release its data on U.S. crude inventories at 4:30 p.m. EST on Tuesday. Official U.S. government inventory data was due on Wednesday morning.

Analysts in a Reuters poll forecast U.S. weekly crude stocks declined 1.5 million barrels in the week ended Nov. 17.

Analysts said Brent was expected to fluctuate in a range beetween $61 and $63 ahead of the Organization of the Petroleum Exporting Countries' meeting on Nov. 30. OPEC, Russia and other producers are expected to extend a deal to cut output to fight a global supply overhang and support prices. The deal's expiry date is currently March 2018.

"The market is just waiting for confirmation that OPEC wants to move on with the extension," said Ole Hansen, senior manager at Saxo Bank.

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