CANADA STOCKS-TSX rallies as US inflation data boosts commodity prices

By Fergal Smith

Feb 13 (Reuters) - 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 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%.

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, which includes metal mining shares, jumped 4.4% as the price of gold XAU= moved back above $5,000 per ounce on Fed rate-cut hopes.

Energy .SPTTEN also posted gains, rising 1.8%. The price of oil CLc1 settled 0.1% higher at $62.89 as the U.S. data offset supply concerns.

Pipeline operator Enbridge Inc ENB.TO 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 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 was up 4% and technology .SPTTTK ended 1.8% higher.