CORRECTED-CANADA STOCKS-TSX inches up as mining stocks lead recovery (Dec 30)

By Avinash P

Dec 30 (Reuters) - Canada's main stock index edged higher on Tuesday, lifted by mining stocks as precious metal prices bounced back from Monday's sharp decline, setting a positive tone for the penultimate session of what has been a stellar year for the TSX.

Toronto's S&P/TSX Composite index .GSPTSE was up 0.2% at 31,964.75 points as of 10:20 a.m. ET, breaking a two-day losing streak driven by a pause in the precious metals rally.

The benchmark is on track to end the year more than 29% higher, its best showing since 2009, lifted by heavyweight banking and mining stocks.

Gold XAU= and silver XAG= gained ground on Tuesday, as safe-haven demand returned due to persistent geopolitical risks following a brief spell of profit-taking. GOL/

Mining stocks took the cue and were top gainers on the TSX, with the gold sub-index .SPTTGD advancing 1.3%, closely followed by the materials sector .GSPTTMT, which rose 1%. Energy stocks .SPTTEN also rose 1%.

Meanwhile, Wall Street indexes fell as technology stocks came under renewed selling pressure. TSX's technology sub-index .SPTTTK tracked the decline, losing 0.3% in the largest sectoral drop of the day.

Market observers say the "Santa Claus rally," where indexes usually gain during the final five trading days of the year and the first two sessions of January, has been muted this year.

Michael Dehal, senior portfolio manager at Dehal Investment Partners at Raymond James, said with just a few days left in the year, "some year-end rebalancing is going on."

On the macroeconomic front, investors await the minutes of the U.S. Federal Reserve's December meeting, due to be released later in the day, which could provide insight into future monetary policy in an otherwise data-light week.