CANADA STOCKS-TSX climbs to record high as risk appetite grows

By Fergal Smith

Dec 19 (Reuters) - Canada's main stock index rose to a record high in heavy volume on Friday, led by gains for technology and metal mining shares, as investors bet that government stimulus and lower borrowing costs would help underpin corporate earnings.

The S&P/TSX Composite Index .GSPTSE ended up 314.92 points, or 1%, at 31,755.77, eclipsing the record closing high it posted on December 11. For the week, the index was up 0.7%, while it has added 28.4% since the start of the year, which would be its largest advance since 2009.

U.S. stocks also climbed, helped by re-ignited optimism around AI-related shares.

"It feels like we're back to a risk-on mode," said Greg Taylor, chief investment officer at PenderFund Capital Management.

"The earnings outlook looks ok and it's hard to be really bearish when the economy is actually doing ok, you've got rate cuts, you've got governments that are trying to stimulate the economy."

The Bank of Canada has lowered its benchmark interest rate to a three-year low of 2.25%, while Canadian Prime Minister Mark Carney has committed to spend billions of dollars on measures to raise productivity and is aiming to speed up natural resource project construction.

Canadian retail sales fell by 0.2% in October from the prior month but a preliminary estimate showed sales rebounding by 1.2% in November.

The materials group .GSPTTMT, which includes fertilizer companies and metal mining shares, gained 2.4% as copper >HGc1> and gold XAU= prices climbed.

"Gold is still having a great year and that's setting up again for positive returns next year," Taylor said.

The price of oil CLc1 also rose, settling 0.9% higher at $56.66 a barrel, which helped boost the energy sector.

Energy .SPTTEN was up 1% and heavily weighted financials .SPTTFS ended 0.7% higher.

Technology .SPTTTK added 2.5% even as shares of BlackBerry Ltd BB.TO fell 14.1% after the company reported quarterly results.