CANADA STOCKS-G7 optimism helps TSX extend record-setting run

By Fergal Smith

June 12 (Reuters) - Canada's main stock index rose on Thursday to a new record high as gold prices climbed and investors weighed prospects of Canada moving closer to a trade deal with the United States at a Group of Seven leaders summit that begins this weekend.

The S&P/TSX composite index .GSPTSE ended up 91.59 points, or 0.4%, at 26,615.75, eclipsing Wednesday's record closing high.

U.S. Treasury Secretary Scott Bessent said he expects to attend the Group of Seven leaders meeting in Canada, which runs from June 15 to 17, with President Donald Trump, and he expects the two of them will meet with Canadian Prime Minister Mark Carney.

"For Canadian investors, I think there's a building expectation that Carney and Trump may achieve some sort of agreement to de-escalate the trade and tariff war between our two countries," Brian Madden​​​​, chief investment officer at First Avenue Investment Counsel Inc.

"Carney has got some bargaining chips so I think there's grounds for some sort of deal to be made," Madden said. "Maybe the government decides to stand down on the digital services tax, which we know the (Trump) administration doesn't like."

A U.S. tax and spending bill under consideration contains a proposed tax, known as Section 899, that applies a progressive tax burden of up to 20% on foreign investors' U.S. income as pushback against countries that impose taxes the U.S. considers unfair, such as digital service taxes.

The materials group, which includes metal mining shares, rose 0.9% as geopolitical risks and a weaker U.S. dollar helped push up the price of gold XAU=. Copper HGc1 prices also climbed.

Still, shares of Ivanhoe Mines IVN.TO were down 7.2% after the diversified mining company cut its output forecast.

Utilities gained 0.9% as long-term borrowing costs declined. The Canadian government 10-year bond yield CA10YT=RR was down 2.4 basis points at 3.328%.

Technology was the only one of 10 major sectors to lose ground, falling 0.8%.