TSX rallies as US inflation data boosts commodity prices

Canada's main stock index rebounded on Friday, led by gains for Magna and commodity-linked shares, as softer-than-expected U.S. inflation data raised prospects of Federal Reserve interest rate cuts. The S&P/TSX composite index (.GSPTSE), opens new tab ended up 608.43 points, or 1.9%, at 33,073.71, recouping much of the previous day's sharp decline. For the week, the index added 1.9%. Get a daily digest of breaking business news straight to your inbox with the Reuters Business newsletter. Sign up here. U.S. consumer prices increased less than expected in January amid cheaper gasoline and a moderation in rental inflation.   "If inflation continues to trend lower over the next few months it makes a strong case for a June cut," said Ian Chong, a portfolio manager at First Avenue Investment Counsel Inc. "You are seeing a lot of these rate-sensitive sectors outperform today." The Canadian 10-year yield touched a two-month low of 3.234%. "The markets have been beaten up the last couple of days, so perhaps we're getting a reprieve from this whole AI disruption, risk-off sentiment and dip buyers are reentering the market," Chong said. The materials group (.GSPTTMT), opens new tab, which includes metal mining shares, jumped 4.4% as the price of gold moved back above $5,000 per ounce on Fed rate-cut hopes.   Energy (.SPTTEN), opens new tab also posted gains, rising 1.8%. The price of oil settled 0.1% higher at $62.89 as the U.S. data offset supply concerns. Pipeline operator Enbridge Inc (ENB.TO), opens new tab beat expectations for fourth-quarter profit and said it had sanctioned several projects to help meet surging demand for power across North America. Its shares were up 3.8%. Magna International (MG.TO), opens new tab shares soared 18.9% after the company forecast a strong annual profit, helped by cost-saving measures and steady demand for its auto parts. Consumer discretionary (.GSPTTCD), opens new tab was up 4% and technology (.SPTTTK), opens new tab ended 1.8% higher.