TORONTO -- Canada's main stock index closed higher in broad-based gains Friday, while the loonie made gains after a stronger-than-expected reading of inflation.
Markets reacted positively for a second day after the U.S. and China said they would hold trade talks in late August for the first time since early June.
The potential easing of trade tensions has been well received by markets after tariff disputes between the U.S. and Turkey added to geopolitical stresses in recent days, said Philip Petursson, chief investment strategist at Manulife Investments.
"If we're getting a little more pleasant talk or pleasant surprises in terms of cooler heads coming to the table to discuss the trade positions a little more rationally, I think that's certainly a positive thing and the markets should take it as such."
The S&P/TSX composite index closed up 98.06 points at 16,323.71 as materials stocks rebounded from heavy losses earlier this week. Friday's gains left the index down 0.02 per cent for the week. The intraday high hit 16,336.89 and volume came in at 173.99 million shares traded.
Major sectors like energy and financials also gained, while information technology was one of the few indexes in the red with a 0.76 per cent drop.
The cannabis-heavy S&P/TSX capped health-care index had the biggest gains at 3.45 per cent as Canopy Growth jumped 8.6 per cent on a continued climb following Constellation Brand's $5-billion investment in the company this week.
Friday's gains on the market were as much about buying on the dip as any new developments, said Petursson.
"I think what we are seeing perhaps is a little bit of buying, taking advantage of a couple of down days and a few bargains to be had out there."
In New York, the Dow Jones industrial average closed up 110.59 points at 25,669.32. The S&P 500 index was down 9.44 points at 2,850.13 and the Nasdaq composite ended down 9.81 points at 7,816.33.
The Canadian dollar averaged 76.45 cents US, up 0.42 of a US cent. The loonie traded up after Statistics Canada reported the annual inflation rate hit 3.0 per cent in July, its highest level since September 2011.
However, investors shouldn't put too much stock in the July number because it was caused in part by the way Statistics Canada keeps track of the air transportation index, said Petursson.
"While the number itself looks quite strong and compelling for the for the Canadian economy, and for the Bank of Canada to move, it really was a change in methodology and should be taken with a big grain of salt."
The October crude contract closed up 33 cents at US$65.21 per barrel and the September natural gas contract ended up four cents at US$2.95 per mmBTU.
The December gold contract closed up 20 cents at US$1,184.20 an ounce and the September copper contract was up a penny at US$2.63 a pound.
