Canada Stocks-TSX posts biggest gain in two weeks as bond yields fall

Canada's main stock index rebounded on Thursday, led by financial and metal mining shares, as a dip in oil prices helped calm bond-market concerns about higher inflation.

The Toronto Stock Exchange's S&P/TSX Composite Index .GSPTSE ended up 382.99 points, or 1.1%, at 35,874.26, after posting on Wednesday its lowest closing level in nearly seven weeks. The gain was the largest for the TSX since September 3.

• Wall Street also rallied as easing oil prices, dropping U.S. Treasury yields and solid labor data helped markets move beyond the Federal Reserve's first interest rate hike in more than three years.
• "We're seeing a bit of a relief rally," said Allan Small, senior investment adviser of the Allan Small Financial Group with iA Private Wealth. "Oil prices are down, yields are down — positive day in the markets."
• U.S. Treasury yields fell as oil prices dipped and investors who were short long-dated bonds took profits. Yields on Canadian government bonds also eased.
• U.S. crude oil futures CLc1 settled 0.5% lower at $101.91 a barrel after reports that additional Saudi crude barrels could reach global markets and ease supply concerns.
• "We'll see what the Bank of Canada says next, but now that the U.S. has moved forward, I don't know if that's going to make the Bank of Canada a little nervous," Small said.
• Investors see a roughly 50% chance the BoC would hike rates at its next policy announcement on October 28, swap market data showed. 0#CADIRPR
• The materials group .GSPTTMT, which includes metal mining shares, rose 3.4% as gold XAU= rebounded from a near six-week low in the previous session.
• Heavily weighted financials .SPTTFS added 0.7% and utilities .GSPTTUT ended 1.2% higher.