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Canada’s main stock edged slightly higher on Tuesday as resource shares gained ground following U.S. inflation data that supported hopes the Federal Reserve could shift to smaller rate hikes, but the index closed well below its session high.

The Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) ended up 3.76 points to 20,023.46 points, after touching 20,341.26, its highest level in more than one week, earlier in the day.

U.S. stock indexes posted stronger gains after a surprisingly small U.S. consumer price increase in November.

“Investors had been extraordinarily negative in regard to inflation and pending central bank monetary policy tightening,” said Brandon Michael, a senior analyst at ABC Funds.

The Fed is widely expected to raise interest rates by 50 basis points on Wednesday, continuing its fight against inflation, while the Bank of Canada has also been raising interest rates at a rapid pace.

The Toronto market’s energy sector rose 1.5% as U.S. crude oil futures settled 3% higher at $75.39 a barrel.

The materials group, which includes precious and base metals miners and fertilizer companies, also gained ground, ending 1.4% higher, as gold and copper prices rose.

Capping gains for the index was a decline of 1.4% for the heavily-weighted financials sector, with shares of Bank of Montreal shares down 1.8% after it announced an offering of common shares.