CANADA STOCKS-TSX extends record-setting run as real estate leads broad-based gains

By Fergal Smith

May 27 (Reuters) - Canada's main stock index rose on Tuesday as real estate shares led broad-based gains and after recent strengthening of the Canadian dollar sent a potential signal that investors are growing more confident investing in the domestic market.

The S&P/TSX composite index .GSPTSE ended up 195.87 points, or 0.8%, at 26,269.00, eclipsing the closing record high it posted on Monday.

"Generally the world is a little more bullish on Canada. Canadian investors are a little more bullish on Canada," said Lorne Steinberg, president, Lorne Steinberg Wealth Management Inc., pointing to recent strength in the Canadian currency.

The loonie CAD= lost ground on Tuesday but has rallied about 7% since hitting a 22-year low in February.

"There's definitely a move to diversify away from the U.S. after years of investing basically only in the U.S.," Steinberg said.

A bruising rollercoaster ride for markets since the start of the Trump administration has seen some investors move away from American assets.

The real estate sector climbed 2.6%, led by a gain of 14.8% for the shares of InterRent Real Estate Investment Trust IIP_u.TO after the company announced a deal to be acquired and as long-term borrowing costs declined.\

The Canadian 10-year yield was trading 7.4 basis points lower at 3.255%, tracking a downshift in U.S. yields.

Consumer staples were another standout, adding 2.2% and heavily weighted financials were up 1%.

Bank of Nova Scotia missed quarterly earnings estimates, burdened by a larger than expected sum of money put aside to shield against bad loans in a challenging environment riddled with trade uncertainties. Still, its shares ended 1.6% higher.

The materials sector was the only one of ten major sectors to end lower, falling 0.2%, as gold XAU= gave back some of its recent gains.