CANADA STOCKS-TSX edges higher as Middle East peace prospects lift sentiment
Updates after market open
May 28 (Reuters) - Canada's main stock index inched up on Thursday, shaking off earlier sluggishness after a report said that the U.S. and Iran had reached an outline agreement to extend their ceasefire.
At 11:09 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 0.15% at 34,463.92 points.
An Axios report said that the two sides agreed on a 60-day memorandum of understanding to extend the truce and launch negotiations on Iran's nuclear program, but the plan still needed U.S. President Donald Trump's signoff.
While markets have been disappointed by false dawns before, even tentative signs of progress toward ending the conflict have been enough to spark rallies in stocks.
Energy shares .SPTTEN rose 0.34%, while the materials group .GSPTTMT gained 1.45%.
Financials .SPTTFS fell 0.88% despite strong earnings from Canadian lenders Royal Bank of Canada RY.TO, TD Bank TD.TO and CIBC CM.TO.
Investors were also assessing the latest U.S. personal consumption expenditures data, which showed that inflation increased at its fastest pace in three years in April, driven by higher energy prices.
Still, analysts at RBC Economics said the U.S. economy was holding up well.
"Labor market data is looking solid, and growth hasn't meaningfully slowed. We don't expect the oil price shock will tip the economy into a recession," they said.
The strength of the U.S. economy often has implications for rate moves by the Bank of Canada.