Energy helps lift Toronto market to near 3-week high

By Fergal Smith

(Reuters) -Canada's main stock index began the new quarter on a positive note on Tuesday as energy and technology shares notched gains, but it remained to be seen whether the index can close the recent gap in performance against some U.S. benchmarks.

The Toronto Stock Exchange's S&P/TSX composite index ended up 78.01, or 0.4%, at 21,953.80, its highest closing level since June 12.

It was the first trading day of the new quarter after the market was closed on Monday for Canada Day and follows a decline of 1.8% in June even as U.S. benchmark the S&P 500 notched gains.

"The problem with Canada is it just does not have the high flying companies that are tied to the key themes that are moving markets more broadly around the world, whether it's the big healthcare names or the technology names," said Sadiq Adatia, chief investment officer at BMO Asset Management.

"The only positive I can see coming out of Canada is the fact that we've started the rate cutting cycle."

The Bank of Canada last month became the first G7 central bank to ease monetary policy, lowering its benchmark rate by 25 basis points to 4.75%. Investors see a roughly 40% chance the BoC will ease further in July.

The energy sector rose 1.5% as the price of oil touched its highest level in more than two months.

Technology was also a standout, rising 1.1%, consumer staples was up 1.2% and heavily weighted financials added 0.6%.

Shares of Onex Corp, which counts WestJet Airlines among its portfolio of investments, were up 4.6% after a strike that led to flight cancellations at WestJet ended.

First Quantum Minerals Ltd shares climbed 3.1% after news that Panama would conduct an environmental audit of the Cobre Panama mine to decide whether it can safely be reopened.

(Reporting by Fergal Smith in Toronto and Nikhil Sharma in Bengaluru; Editing by Vijay Kishore and Josie Kao)