TORONTO -- Canada's main stock index rose alongside U.S. markets as news about another COVID-19 vaccine boosted investors' outlook for the economy and oil demand.

AstraZeneca on Monday became the third major drug company to report late-stage results for a potential COVID-19 vaccine. The prospect of a COVID-19 vaccine has bolstered investors' expectations of an economic recovery next year, said Candice Bangsund, portfolio manager for Fiera Capital.

The S&P/TSX composite index was up 75.43 points at 17,094.53.

In New York, the Dow Jones industrial average was up 327.79 points at 29,591.27, the S&P 500 index was up 20.05 points at 3,577.59, while the Nasdaq composite was up 25.66 points at 11,880.63.

The energy sector has benefitted from vaccine news over the past three weeks, including on Monday, said Bangsund, as hopes rise for a reopening of the economy.

"It's really like a revival of economic activity, whether it's tourism or traveling or airlines," said Bangsund of the effect of the COVID-19 vaccine on the energy sector. Energy stocks finished the day more than seven per cent higher Monday, while the January crude oil contract was up 64 cents at US$43.06 per barrel and the January natural gas contract was up more than five cents at US$2.82 per mmBTU. Shares of Air Canada also ended the day more than three per cent higher.

Canada's main stock index has a high concentration of companies that are sensitive to the global economy, such as energy companies, manufacturers and banks, compared to the tech-heavy Nasdaq. Bangsund said this mix has given the TSX a leg up when it comes to vaccine-related headlines.

"Tech has completely dominated the market rally in 2020," said Bangsund.

"Investors flocked to the potential for higher earnings in an uncertain growth environment. But now, the growth outlook is becoming increasingly visible, particularly should some of these vaccine developments come to fruition and allow for that more rapid recovery and global growth in 2021."

An economic rebound could lead central banks to raise interest rates, a plus for the profitability of banks, said Bangsund. On Monday, the S&P/TSX Capped Financial Index was up nearly one per cent.

The Canadian dollar could also benefit from an economic recovery, as investors increase their appetite for riskier investments such as currency, said Bangsund. The Canadian dollar traded for 76.44 cents US Monday, compared with 76.51 cents US on Friday.

"The renewed appetite for risky assets is inherently positive for the Canadian dollar, while the backdrop of higher commodity prices and specifically crude oil prices is also boosting the Canadian dollar today," Bangsund said.

Mining stocks were down on the day, however, with the materials sector 2.44 per cent lower as gold prices slipped. The December gold contract was down US$34.60 at US$1,837.80 an ounce and the December copper contract was down more than three cents at nearly US$3.26 a pound.

"Gold is typically a flight-to-safety play," said Bangsund. "Gold prices today have now slumped … as growing optimism over a safe and effective vaccine has curbed investor demand for safe haven assets."

This report by The Canadian Press was first published Nov. 23, 2020.