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TSX ends up 0.2% at 25,473.30

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Posts highest closing level since Dec. 11

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Energy adds 1.2%; materials gains 0.9%

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Bank of Canada cuts by 25 basis points

(Updates at market close)

By Fergal Smith

Jan 29 (Reuters) - Canada's main stock index rose to a

seven-week high on Wednesday as the Federal Reserve pointed to

robust U.S. economic activity and after the Bank of Canada cut

interest rates to help the domestic economy cope with expected

U.S. trade tariffs.

The Toronto Stock Exchange's S&P/TSX composite index

ended up 0.2% at 25,473.30, its highest closing level

since December 11.

The Fed held interest rates steady and gave little insight

into when further reductions in borrowing costs may take place

in an economy where inflation remains above target, growth

continues, and the unemployment rate is low.

"There is a bit of a reflationary buoyancy in the market

from the language of the Fed," said Sid Mokhtari, chief market

technician for CIBC Capital Markets.

"I wouldn't be surprised the yield curve in both the U.S.

and Canada to continue to steepen and that should naturally buoy

your financials and the pro-cyclical area of the market."

Cyclical stocks, such as financials, industrials and

resource companies that tend to be sensitive to the performance

of the economy, account for nearly 80% of the TSX's weighting.

The energy group rose 1.2% even as the price of oil

settled 1.6% lower at $72.62 a barrel. Uranium producer NexGen

Energy Ltd ( NXE ) was up 6.8%.

The materials group, which includes fertilizer companies and

metal mining shares, added 0.9% as copper prices rose.

The Bank of Canada cut its key policy rate by 25 basis

points to 3%, lowered its growth forecast and warned Canadians

that a tariff war triggered by the U.S. could cause major

economic damage.

"As we work through all of these challenges with the U.S.

and political uncertainty, the Bank of Canada's in there trying

to support the economy as they can," said Colin Cieszynski,

chief market strategist at SIA Wealth Management.