Canadian stocks closed at a record on Thursday, rallying alongside global markets, as investors focused on the prospect of higher government spending once Joe Biden takes office in less than two weeks.

The S&P/TSX Composite Index rose 1.1 per cent to 18,027.57, surpassing the previous record of 17,944.06 set last February before the pandemic roiled markets. The country’s largest public company, Shopify Inc., jumped 6.9 per cent.

The index has climbed four straight days as investors flock to value-oriented and cyclical sectors in Canada, including energy and materials. The S&P/TSX Health Care index, primarily comprised of pot stocks, has risen 13 per cent this week. The industry got a boost on optimism that a Democratic-led Senate will be positive for the marijuana industry in the U.S.

“Possible Democratic control of the U.S. Senate would improve the sales prospects for legal U.S. cannabis producers and sellers,” said Bloomberg Intelligence analyst Kenneth Shea. That outcome could lead to the removal of marijuana from the Controlled Substances Act, helping to pave the way for populous states such as New York and Pennsylvania to accelerate legalization for recreational use.

Cannabis companies are the top four performers in the TSX benchmark so far this week, led by Cronos Group Inc. and Canopy Growth Corp.

With this week’s gains, the TSX has rebounded more than 60 per cent from last year’s low on March 23.

The first leg of the rally got a boost from the advance in gold and technology stocks. The latter group is now about 10 per cent of the TSX index.

“The drivers of equity returns for Canadian indexes are beginning to change, and our view is that it will continue,” Martin Toner, a Toronto-based analyst for ATB Capital Markets, told clients in a note. Toner is bullish on the information technology group and thinks the sector could eventually double to a 20 per cent weighting.

Investors also began rotating into value-oriented stocks in the latter part of 2020.

“The current upward trajectory in reflation is more than just a knee-jerk cyclical reaction but a transition into a sustainable secular phase,” said Tina Normann, a technical research analyst at Eight Capital. The move resembles market trends of the late 1960s and the period from 2003 to 2008, she said.

Still, Normann thinks a volatile January will slow the pace of recovery in the markets -- but set the stage for a rally in spring and early summer.

“We are looking for a majority of this year’s market strength to take place in the second quarter and third quarter,” she said.

--With assistance from Michael Bellusci and Derek Decloet.