CANADA STOCKS-TSX hovers near record level ahead of week's key economic data

By Sanchayaita Roy

Sept 4 (Reuters) - Canada's main stock index hovered near a record high on Thursday, as investors awaited employment data that could influence the Bank of Canada's September interest-rate decision.

The S&P/TSX composite index .GSPTSE was up 0.03% at 28,760.46, easing off its record peak touched earlier in the session.

The index has logged three consecutive record closing highs since Friday after a GDP report showed Canada's economy contracted more than expected in the second quarter, prompting market expectations for a potential rate cut.

Canada and the U.S. are set to release August employment reports on Friday, which could play a pivotal role in shaping the central banks' policy decisions.

Economists forecast Canada's economy added 10,000 jobs and the unemployment rate rose to 7% from 6.9% a month earlier.

"The Federal Reserve is likely going to cut (interest rate) and that's what the market's expecting and that gives the BoC room to cut as well," said Martin Pelletier, senior portfolio manager at TriVest Wealth Counsel.

"Both economies are weakening, but Canada is substantially weaker and going to be impacted by more so from the tariffs dispute. And the BoC is going to have to act prudently to adjust for that."

Money markets see a 67.6% chance of a 25-basis-point interest-rate cut on September 17. The benchmark rate is at 2.75%. 0#CADIRPR

The TSX's technology sector .SPTTTK rose 0.8%, led by Descartes' DSG.TO 5.5% gains after the supply chain technology provider beat quarterly revenue estimates.

Conversely, commodity-heavy material .GSPTTMT and energy .SPTTEN stocks fell 0.5% each, tracking losses in oil and gold prices.

Data showed on Thursday Canada's trade deficit narrowed in July as overall exports rose.

Separate data revealed U.S. private payrolls increased less than expected in August, while weekly jobless claims were higher than expected. The focus now shifts to Friday's highly anticipated nonfarm payrolls data.