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Canada’s main stock index rose to a four-month high before finishing flat on Friday, driven by energy shares on the back of crude prices, which rose on renewed hopes that the United States and China could resolve their ongoing trade dispute.

Optimism on trade lifted shares across the world. Top U.S. and Chinese trade negotiators haggled on over the details of a set of agreements aimed at ending their trade war, just one week before a March 1 deadline for a deal expires.

The Toronto Stock Exchange’s S&P/TSX composite index was unofficially up 12.15 points, or 0.08 per cent, at 16,013.01.

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The energy sector rose 0.4 per cent as oil prices touched three-month highs. Cenovus Energy Inc. rose 1.8 per cent, while Husky Energy Inc. finished 1.6 per cent higher.

Marijuana producers weighed on health care stocks, which dipped 1.2 per cent on the day. Aphria Inc. and Cronos Group Inc. lost 2.9 per cent and 2.8 per cent, respectively.

Leading the index were Turquoise Hill Resources Ltd., up 12.5 per cent, Keyera Corp., up 9.5 per cent, and Hudbay Minerals Inc., higher by 7.6 per cent.

Lagging shares were Cott Corp., down 11.5 per cent, Lucara Diamond Corp., down 8.4 per cent, and Altus Group Ltd, lower by 6.9 per cent.

The Canadian dollar strengthened against its U.S. counterpart as stocks and oil prices rose and domestic data showed a drop in retail sales that was less than the market expected.

Retail sales edged down by 0.1 per cent in December from November to $50.35-billion due to lower gasoline prices, Statistics Canada said. Analysts had forecast a 0.3-per-cent decline.

U.S. stocks climbed and the Dow and Nasdaq posted a ninth straight week of gains on Friday as investors clung to signs of progress in the ongoing trade talks between the United States and China.

The Dow Jones Industrial Average rose 181.48 points, or 0.7 per cent, to 26,032.11, the S&P 500 gained 17.78 points, or 0.64 per cent, to 2,792.66 and the Nasdaq Composite added 67.84 points, or 0.91 per cent, to 7,527.55.

Oil prices touched their highest since mid-November on Friday and posted weekly gains for the second week in a row, boosted by hopes that U.S.-China trade talks would soon produce a deal, although new record U.S. oil supply limited gains.

Brent crude futures briefly reached $67.73 a barrel, their 2019 high. The global benchmark fell 5 cents to settle at $67.12 a barrel. Brent gained 1.2 per cent on the week.

U.S. West Texas Intermediate (WTI) crude futures gained 30 cents to settle at $57.26 per barrel, after hitting $57.81 earlier on Friday, also their highest for the year. WTI recorded a 3-per=cent weekly rise and reached its strongest settlement price of 2019.

Top U.S. and Chinese trade negotiators met on Friday to wrap up a week of talks that have seen the two sides struggle to reach a deal by a March 1 deadline.

U.S. President Donald Trump will meet with Chinese Vice Premier Liu He at the Oval Office later on Friday.

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“Oil prices, as well as the stock market have been rising on the anticipation that China and the U.S. would agree to a trade deal,” said Andy Lipow, president of Lipow Oil Associates in Houston. “In addition, we’re seeing a tightening of oil supplies around the world resulting from OPEC and non-OPEC production cuts.”

Both oil benchmarks have risen this year after the Organization of the Petroleum Exporting Countries and its allies, including Russia, began to cut output to prevent a supply glut from growing.

Reuters

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