CANADA STOCKS-TSX rises on energy boost; US-China talks in focus

By Ragini Mathur

June 10 (Reuters) - Canada's main stock index rose on Tuesday as rising oil prices boosted the energy sector, while investors awaited key developments from the second day of the U.S.-China trade negotiations.

The S&P/TSX composite index .GSPTSE, up 0.2% at 26,420.31 points, was hovering near the record high levels reached on Friday.

U.S. Commerce Secretary Howard Lutnick said trade talks with China were going well as the two sides met for a second day in London.

Any progress in the negotiations is likely to bring relief to the markets given that President Donald Trump's often-shifting tariff announcements and swings in U.S.-China ties have affected global supply chains and economic growth worldwide.

"The Canadian markets are benefiting from obviously the optimism and the positive direction of U.S. equity markets," said Matt Skipp, President of SW8 Asset Management.

"And I think the U.S. markets are moving higher on the assumption that Trump will not do anything that will hurt American assets, equities etc."

White House economic adviser Kevin Hassett said on Monday the U.S. was likely to agree to lift export controls on some semiconductors in return for China speeding up the delivery of rare earths.

Almost all major sectors were trading in the green on the TSX, with energy shares .SPTTEN leading the way as oil prices advanced , buoyed by U.S.-China trade talks and a dip in Saudi Arabian crude supply to China.

Consumer staples .GSPTTCS and consumer discretionary .GSPTTCD sectors gained 1% and 0.7%, respectively.

Bucking the trend, the materials sector .GSPTTMT was down almost 1%.

Looking ahead, markets will focus on Wednesday's U.S. inflation report, which will influence expectations for Federal Reserve interest-rate cuts.