CANADA STOCKS-TSX hits record high as Middle East tensions boost oil prices

By Ragini Mathur and Fergal Smith

June 11 (Reuters) - Canada's commodity-linked main stock index rose on Wednesday as oil prices jumped and investors focused on U.S. inflation data that could increase the chances of the Federal Reserve cutting interest rates in the coming months.

The S&P/TSX composite index .GSPTSE ended up 97.85 points, or 0.4%, at 26,524.16, eclipsing the record closing high it posted on Friday.

U.S. consumer prices increased less than expected in May as cheaper gasoline partially offset higher rents. The two-year U.S. Treasury yield US2YT=RR, which typically moves in step with interest rate expectations, was down 6.1 basis points at about 3.95%.

"On a day-to-day basis for the past couple of months, it seems like the trade updates have really driven markets," said Josh Sheluk, a portfolio manager at Verecan Capital Management. "Now it seems like maybe we are getting past that and refocusing on real economic data and things that are driving the market in a more meaningful way."

"As long as there is not a recession in Canada and the U.S., I think markets should continue to go higher," Sheluk said.

Dollarama DOL.TO beat quarterly sales and profit estimates as consumers favored discounted alternatives for household supplies and groceries amid domestic economic uncertainty. The company's shares jumped 9.8%, while the consumer discretionary sector ended 1.7% higher.

Energy added 2.2% as the price of oil CLc1 settled 4.9% higher at $68.15 a barrel on rising Middle East tensions.

Safe-haven gold also rose in a boost for metal mining stocks. The materials group was up 0.6%, and technology added 1.4%.