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Canada’s main stock index rose on Thursday to its highest closing level in more than five months, led by gains for the technology and materials sectors, as optimism grew that the Federal Reserve would slow the pace of interest rate hikes.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 61.81 points, or 0.3%, at 20,344.07, its highest closing level since June 9.

With U.S. markets shut for Thanksgiving, the focus remained on Wednesday’s release of minutes from the Federal Open Market Committee’s meeting earlier this month pointing to a slower pace of rate increases starting as soon as December.

“Investors continue to respond bullishly to yesterday’s FOMC minutes,” Colin Cieszynski, chief market strategist at SIA Wealth Management, said in a note.

The Toronto market’s technology sector rose 0.7% as declining bond yields raised the value to investors of the future cash flows that high-growth companies are expected to produce.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.8%, while heavily-weighted financials ended 0.2% higher.

The sector was helped by a gain of 0.7% for Manulife Financial Corp after the company said it will outsource its property operations in Canada to focus on its entrepreneurial investment management unit.

Corus Entertainment Inc was a standout performer on Thursday, with its shares gaining 5.7%.

The TSX energy sector was up about 0.2% as West Texas Intermediate crude held steady, hovering in sight of two-month lows as the level of a proposed G7 cap on the price of Russian oil raised doubts about how much it would limit supply.

A bigger-than-expected build in U.S. gasoline inventories and widening COVID-19 controls in China also added downward pressure on crude prices.

Brent crude futures were down 29 cents, or 0.3%, to $85.12 a barrel by 15.15 p.m. ET (2015 GMT), while U.S. WTI crude futures rose 2 cents, to $77.96.

Both benchmarks plunged more than 3% on Wednesday on news the planned price cap on Russian oil could be above the current market level.

European Union governments remained split over what level to cap Russian oil prices at to curb Moscow’s ability to pay for its war in Ukraine without causing a global oil supply shock, with more talks possible on Friday if positions converge.

Oil prices also came under pressure after the Energy Information Administration (EIA) said on Wednesday that U.S. gasoline and distillate inventories rose substantially last week.

But crude inventories fell by 3.7 million barrels to 431.7 million barrels in the week to Nov. 18, compared with expectations for a 1.1 million barrel drop in a Reuters poll of analysts.

China on Wednesday reported the highest number of daily COVID-19 cases since the start of the pandemic nearly three years ago. Local authorities tightened controls to stamp out the outbreaks, adding to investor concern over the economy and fuel demand.

Reuters, Globe staff

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