July 15 (Reuters) - Canada's main stock index extended its record-setting rally on Monday, led by gains for energy shares and helped by a jump in steelmaker Stelco Holdings' stock after the company said it reached a deal to be acquired.
The S&P/TSX composite index (.GSPTSE), opens new tab ended up 78.16 points, or 0.3%, at 22,751.68, posting its fourth straight day of gains. On Thursday, it climbed above the record closing high it posted in May.
"What we're seeing is a continuation of that rally that kicked off on Thursday with a bit of a rotation towards the value and cyclical names," said Greg Taylor, a portfolio manager at Purpose Investments.
"It looks like a pretty good move, and we're seeing the right things with the commodities leading and real assets starting to take over."
The Toronto market has a heavy weighting in stocks of companies with physical assets such as metals and oil. Combined, the materials and energy sectors account for 32% of the index's weighting.
The energy sector climbed 1.8% as speculation that the Federal Reserve would soon cut interest rates pressured the U.S. dollar in recent days and raised prospects of increased demand for oil.
The Bank of Canada has already begun cutting rates. Canadian businesses expect interest rates to come down by up to 100 basis points over the next year but their investment spending remains below average owing to a weak demand outlook, the central bank said in its second-quarter survey.
The industrials group added 0.6%, financials were up 0.5% and real estate ended 0.9% higher.
Stelco Holdings' (STLC.TO), opens new tab shares soared nearly 74% after U.S. steelmaker Cleveland-Cliffs (CLF.N), opens new tab said reached an agreement to buy the company for C$3.85 billion ($2.8 billion).
Among the biggest decliners was Canada Goose Holdings Inc. Its shares sank 9.4% to hit the lowest since May 15.
Reporting by Fergal Smith in Toronto and Nikhil Sharma in Bengaluru; Editing by Vijay Kishore, Shreya Biswas and Cynthia Osterman
