CANADA STOCKS-TSX hits record high as US-Iran deal optimism boosts risk sentiment

Updates prices and details throughout

TSX up 0.4%

Miners lead gains, energy drags

Canadian home sales rise 5.5% in May

By Tharuniyaa Lakshmi

June 16 (Reuters) - Canada's main stock index rose to a record high on Tuesday after U.S. President Donald Trump said at the G7 summit that Washington's deal with Tehran was moving ahead.

At 9:53 a.m. ET, the Toronto Stock Exchange's S&P/TSX Composite index .GSPTSE was up 0.4% at 35,437.41 points.

  • The interim agreement would extend a tenuous ceasefire announced in April by another 60 days and reopen the Strait of Hormuz, which has been effectively blocked since February, after U.S.-Israeli strikes against Iran.

  • "The Middle East conflict deal is definitely supporting markets, and the rally is based on hopes that a final signing will happen, but it is more of a memorandum of understanding, not an official document, with key details still to be discussed," said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.

  • The materials index .GSPTTMT, which includes stocks of metal miners, was up 2.2%, leading gains on the resource-heavy TSX. SSR Mining SSRM.TO, NovaGold Resources NG.TO and Seabridge Gold SEA.TO rose between 5.6% and 10.2%.

  • Mining stocks were also supported by a rise in gold prices as expectations of interest rate hikes from the U.S. Federal Reserve this year eased, following news of the interim U.S.-Iran deal.

  • Heavyweight financials .SPTTFS rose 0.4%, adding to gains.

  • Six of the 10 TSX sectors were in the green, with the energy sub-index being the biggest drag, down 0.8%, after oil prices fell to a three-month low on the prospect of renewed supplies against weak physical demand. O/R

  • "The price of oil is falling quite rapidly and if there is some sort of deal, I anticipate it going back to where it was before the conflict," Small said.

  • Meanwhile, Canadian home sales rose 5.5% in May, making up some ground after a slow start to the typically active spring market, and prices edged lower, data from the Canadian Real Estate Association showed.

  • Apparel maker Gildan Activewear fell 5.1% after Jehoshaphat Research said it is shorting the stock.


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