CANADA STOCKS-TSX rises the most in four months as metal prices rebound

By Fergal Smith

Feb 6 (Reuters) - Canada's main stock index rounded out a volatile week on a strong note on Friday as metal prices rallied and investors took advantage of recent cheapening of the market.

The S&P/TSX Composite Index .GSPTSE ended up 476.38 points, or 1.5%, at 32,470.98, posting its biggest advance since October 14 and clawing back most of the previous day's sharp decline. For the week, the index was up 1.7%.

Wall Street also jumped, with chip stocks rallying on expectations they would benefit from increased spending on AI data centers by Amazon and Alphabet.

"Today seems a little bit of a relief rally and investors are picking up some of the bargains that have been created by the sell-off pretty much across the board," said Philip Petursson, chief investment strategist at IG Wealth Management.

"We're just getting into earnings season for the TSX. Similar to what we're seeing in the United States, earnings are coming in quite strong and that should be the expectation that we get pretty decent earnings."

Domestic employment data was mixed. It showed that the economy unexpectedly shed 24,800 jobs in January but the unemployment rate dipped to a 16-month low of 6.5% as fewer people looked for work.

"The positive is that the rout we've seen in the metals sector it looks like it's perhaps behind us with the strength we've seen in the gold names today and other precious metals," Petursson said.

The materials group .GSPTTMT, which includes metal mining shares jumped 3.9%. Gold XAU= rallied 4.8%, helped by bargain hunting, a slightly weaker U.S. dollar and lingering concerns over U.S.-Iran talks in Oman, while silver XAG= recovered from a 1-1/2-month low.

The price of oil CLc1 also rose, settling 0.4% higher at $63.55 a barrel, which helped lift energy .SPTTEN by 1.9%.

Heavily weighted financials .SPTTFS added 0.9% and industrials ended 1.5% higher.

Nine of 10 major sectors posted gains. The exception was the defensive utilities sector, which ended 0.2% lower.