CANADA STOCKS-TSX climbs to record high as commodity-linked stocks gain

By Avinash P

Nov 26 (Reuters) - Canada's main stock index climbed to a record high on Wednesday, with commodity-linked stocks leading the gains, as growing confidence in an imminent interest-rate cut from the U.S. Federal Reserve fueled market sentiment.

At 10:23 a.m. ET, Toronto's S&P/TSX composite index .GSPTSE was up 0.6% at 31,097.55, building upon the record closing levels achieved in the previous session.

Wall Street's major indexes also advanced, while investors analyzed fresh economic data that solidified expectations for a Fed rate cut in December.

Recent dovish remarks from influential policymakers, coupled with reports indicating softening consumer demand, have shifted market expectations.

Investors are pricing in an 84.9% chance of a 25-basis-point rate reduction next month- nearly double the likelihood projected just last week, according to the CME's FedWatch Tool.

Meanwhile, Canada's commodity-heavy stock index has surged over 25% this year, while touching multiple record peaks, bolstered by a safe-haven rally in gold and AI-led gains on Wall Street.

"Canada has performed slightly better than the U.S. over the past few days. A key driver has been the commodity sector, which has delivered strong performance this year and continues to do well," said Devin Cattelan, portfolio manager at Verecan Capital Management.

"There's been increased demand for materials like copper and uranium, driven by data center construction and rising infrastructure spending."

Commodity markets showed strength again on Wednesday with the gold subindex .SPTTGD rising 2.5% as the precious metal reached a two-week high.

Broader mining stocks .GSPTTMT outpaced other sectors, with a 2% gain as copper rose to its highest in almost a month. GOL/MET/L

Energy stocks .SPTTEN also advanced 0.5% even as oil prices dipped on Wednesday, after declining to a one-month low during the previous session. O/R