Canada's commodity-linked main stock index ended slightly higher on Wednesday as rising expectations that interest rates have peaked offset lower oil prices. The Toronto Stock Exchange's S&P/TSX composite index ended up 3.99 points at 20,113.96, in a rebound from Tuesday. On Monday it notched its highest closing level in two months at 20,246.47.

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"Markets are in a good mood," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth.

The recent drop in bond yields on hopes that the Federal Reserve and Bank of Canada are done raising rates has bolstered sentiment, Small added.

Bank of Canada Governor Tiff Macklem said interest rates might have peaked, given that excess demand has vanished and weak growth is expected to persist for many months.

The biggest gainers were so-called bond proxies, sectors that tend to produce predictable cash flows and could particularly benefit from a peak in interest rates.

The consumer staples sector rallied 2.6 per cent as George Weston Ltd, which owns Canada's largest food and drug retailer Loblaw, climbed 6.7 per cent. Real estate added 1.1 per cent and the utilities sector was up 0.4 per cent.

Energy was a drag, falling 1.5 per cent as oil settled 0.9 per cent lower at $77.10 a barrel after OPEC+ producers unexpectedly delayed a meeting on production cuts.