Canada's main stock index rose on Monday to a nearly two-week high, boosted by solid gains for financials as investors cheered French election results that limited the risk of another core member leaving the European Union.

Some of the index's economically-sensitive sectors, such as industrials, consumer discretionary and financials, benefited most as the market's favored candidate won the first round of the French election.

"We are seeing notable outperformance in the financial sector," said Candice Bangsund, vice president, global asset allocation at Fiera Capital Corporation.

"A lot of that is spillover from the rebound in European financial stocks, but also from the backup in interest rates."

Higher bond yields reduce the value of insurance companies' liabilities and increase net interest margins of banks.

The financials group gained 1.5 per cent, with Royal Bank of Canada climbing 1.6 per cent to $96.07 and insurer Manulife Financial Corp up 3.0 per cent at $23.84.

Industrials gained 0.9 per cent and consumer discretionary stocks rose 0.7 per cent, while the market awaited a U.S. announcement on Wednesday of a tax code overhaul.

"They [the Trump administration] seem to be shifting their focus back to the domestic pro-growth agenda," Bangsund said.

The Toronto Stock Exchange's S&P/TSX composite index closed up 97.98 points, or 0.63 per cent, to 15,712.46, its highest close since April 11.

Seven of the index's 10 main groups ended higher.

The materials sector, which includes precious and base metal miners and fertilizer companies, lost 0.8 per cent as gold prices retreated.

Goldcorp Inc declined 2.1 per cent to $20.00 and Barrick Gold Corp fell 1.0 per cent to $25.71. Barrick is due to report quarterly earnings later on Monday, with Goldcorp set to follow on Wednesday.

Smaller producer Semafo Inc slumped 15.7 per cent to $3.32, its lowest in more than a year, after the gold miner reduced its production outlook for 2017.

The energy group was little changed as oil prices fell. U.S. crude oil futures settled 39 cents US lower at US$49.23 a barrel.

Home Capital Group Inc shares fell 9.1 per cent to $17.50 after the country's biggest non-bank lender said founder and former Chief Executive Officer Gerald Soloway would step down from its board, days after regulators accused the company of making "materially misleading statements" to investors.

Precision Drilling Corp dropped 3.3 per cent to $5.64 after reporting a smaller-than-expected rise in revenue. 

U.S. MARKETS

U.S. stocks rallied on Monday, tracking a relief rally that swept through Asian and European markets, after centrist candidate and market favorite Emmanuel Macron won the first round of the French presidential election.

Pro-EU Macron is expected to beat right-wing rival Marine Le Pen in a deciding vote on May 7 according to polls, which were mostly right about the first-round results.

"This alleviates fears that we were going to have to navigate a French exit [from] the European Union," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

"This is a classic relief rally showing up most in financials," he said. "We cleared this hurdle and now it's a little bit more clear running."

European banks jumped 7.4 per cent while banks on the S&P 500 added 2.8 per cent.

The moves across markets point to an unwinding of bets taken in the past few days when traders had turned defensive ahead of the French election.

The Dow Jones Industrial Average rose 216.13 points, or 1.05 per cent, to 20,763.89, the S&P 500 gained 25.46 points, or 1.08 per cent, to 2,374.15 and the Nasdaq Composite added 73.30 points, or 1.24 per cent, to 5,983.82.

MSCI's gauge of stocks across the globe gained 1.56 per cent to 453.5 after touching a record high of 453.7.

U.S. investors are also gearing up for the busiest earnings week in at least a decade, with over 190 S&P 500 members, including heavyweights Alphabet and Microsoft , due to report results this week.

"Earnings are coming in better than expected and this is for a quarter where estimates were pretty tight. We didn't see much pullback with estimates in the course of the quarter, so expectations were high and we're beating them," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

Of the 100 S&P 500 companies that have reported results so far, 77 per cent have beaten profit expectations, according to Thomson Reuters I/B/E/S. This has helped lift the blended profit growth estimates to 11 per cent from 10 per cent at the start of the earnings season.

Medical device maker C R Bard jumped almost 20 per cent to US$302.41 after U.S. medical equipment supplier Becton Dickinson said it would buy Bard for US$24 billion.

Defensive trades suffered as traders embraced risk. Spot gold dropped 0.6 per cent to US$1,276.10 an ounce. The safe-haven Japanese yen weakened 0.58 per cent versus the greenback at 109.73 per dollar. The CBOE Volatility index ended at 10.84, its lowest since Feb. 14.

Advancing issues outnumbered declining ones on the NYSE by a 2.47-to-1 ratio; on Nasdaq, a 2.61-to-1 ratio favored advancers.

The S&P 500 posted 72 new 52-week highs and two new lows; the Nasdaq Composite recorded 191 new highs and 43 new lows.

About 6.8 billion shares changed hands in U.S. exchanges, above the 6.3 billion daily average over the last 20 sessions.