Canadian stocks extended gains on Thursday, driving the country’s benchmark index to an all-time high, buoyed by expectations of further fiscal support after Democrats gained control of the U.S. Senate.

The S&P/TSX rose as much as 0.9 per cent to 17,986.03, surpassing the most recent record of 17,944.06 on Feb. 20. The index has climbed four straight days, with marijuana stocks leading the advance. Investors have also flocked to value-oriented sectors in Canada, including energy and materials, while selling growth-oriented tech stocks such as Lightspeed POS Inc. and Shopify Inc.

The S&P/TSX Health Care index, primarily comprised of pot stocks, has risen about 14 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 would support the removal of marijuana from the Controlled Substances Act, helping to pave the way for populous states such as New York, Connecticut and Pennsylvania to accelerate legalization for recreational use.

Cannabis companies are the top-four performers in the broader TSX index so far this week, led by Aurora Cannabis Inc. and Canopy Growth Corp.

With this week’s gains, Canada’s S&P/TSX Composite Index has rebounded about 60 per cent from last year’s low in March 23.

The first leg of the rally got a boost from the advance in gold and technology stocks, Investors also began rotating into Canadian value-oriented stocks in the second half 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 Norman, 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, Norman thinks that a volatile January will slow the pace of recovery in the markets and reset the momentum strength needed to sustain reflationary sectors for a spring and early summer rally.

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