TORONTO - Canada's main stock index moved higher as the election of a conservative government in Alberta helped to support the energy sector, says a market observer.

The key sector benefited from earlier momentum in oil prices and stronger-than-expected data overnight about the Chinese economy that boosted the demand outlook for crude, said Candice Bangsund, portfolio manager for Fiera Capital.

Crude prices fell on a disappointing report that U.S. stockpiles shrank less than forecast.

The June crude contract was down 32 cents at US$63.87 per barrel and the May natural gas contract was down 5.5 cents at US$2.52 per mmBTU.

“Obviously a conservative-based leadership is a pro-business, pro-corporate leadership. So that could be what's boosting the energy sector in Canada as well,” she said in an interview.

Energy sector gains were led by Canadian Natural Resources, Crescent Point Energy Corp. and Cenovus Energy Corp., which each increased by more than three per cent.

Industrials, consumer discretionary and the influential financials sector also rose. Financials was aided by higher bond yields and an acceleration of Canadian inflation last month that should reinforce expectations that the Bank of Canada will leave interest rates unchanged next week.

That also assisted the Canadian dollar which traded at an average of 75.01 cents US compared with an average of 74.84 cents US on Tuesday.

Overall, the S&P/TSX composite index closed up 42.04 points at 16,544.24, after hitting an intraday high of 16,553.38 that was a fraction below the high for 2019.

U.S. markets were down on mixed corporate earnings results and a deep decrease in the important health-care sector. The sector lost on concerns about a potential change in health-care policy if medicare-for-all gains political traction heading into next year's presidential election.

“If that spreads more broadly that'll hurt the earnings of a lot of health-care companies and that's a fairly sizable proportion of the S&P 500,” said Bangsund. “So that's why you're seeing that divergence between the Canadian and U.S. markets.”

In New York, the Dow Jones industrial average was down 3.12 points at 26,449.54. The S&P 500 index was down 6.61 points at 2,900.45, while the Nasdaq composite was down 4.15 points at 7,996.08.

Gold fell to a new low for the year with the June gold contract decreasing 40 cents at US$1,276.80 an ounce and the May copper contract was up 3.7 cents at US$2.97 a pound.

Goldcorp. was notable in that 92 million shares traded as its $10-billion all-share takeover by Newmont Mining Corp. nears closing.