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Energy sector lifts Toronto stocks to 11-week closing high

FILE PHOTO: The facade of the original Toronto Stock Exchange building is seen in Toronto

By Shashwat Chauhan and Divya Rajagopal

(Reuters) - Canada's resources-heavy stock index extended gains to finish at an 11-week closing high on Friday, as commodity prices rose after top consumer China eased some COVID-19 curbs.

The benchmark Toronto Stock Exchange's S&P/TSX composite index closed up 121.15 points, or 0.61%, at 20,111.51 points, the highest close since Aug. 25.

The index extended gains after logging its best session since April 2020 on Thursday, when data showing cooling U.S. inflation tempered bets of a super-sized interest hike from the Federal Reserve next month.

The index rose 5.7% for the week.

"It is encouraging to see follow-through buying on a day like today, as you would think most traders might be away due to the national (Remembrance Day) holiday," said Elvis Picardo, portfolio manager at Luft Financial.

However Picardo said it was unclear whether the rising trend had power to last through the end of the year. "So we have to see whether buying continues in this pace for next six weeks,” he said.

The energy sector led gains on Friday, climbing 2.2% as oil prices jumped by more than 3% after top consumer China eased some of its strict COVID curbs, raising hopes for improved economic activity and demand.

Cannabis stocks jumped between 2% and 5%, pushing the broader healthcare index up 4%.

"I think the only thing that could derail this type of rally would be if someone at the Federal Reserve were to say, 'We're still going to continue to raise rates aggressively even though inflation dropped down,'" said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.

"If you ask any of us that invest money for a living, I would say if we can get by today with minimal loss, I think that's a win."

Meanwhile, some Canadian employers say they plan to hold on to their workers even if the economy slips into a recession, rather than risk not be able to rehire later.

Altus Group Limited soared 8.7% after reporting strong third-quarter results, while Algonquin Power & Utilities closed at 19% down on a wider third-quarter loss.

Thomson Reuters Corp closed down 0.9 %. The company said it would buy U.S.-based tax automation software and services provider SurePrep LLC for $500 million in cash.

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Shounak Dasgupta, Devika Syamnath and Cynthia Osterman)