CANADA STOCKS-TSX edges up as energy gains offset broad sectoral losses

By Utkarsh Hathi

March 2 (Reuters) - Canada's main stock index edged up on Monday, recovering from early trading losses, as gains in energy shares overshadowed broad sectoral declines triggered by worries that military conflict in the Middle East could drag on for weeks.

The S&P/TSX composite index .GSPTSE was up 0.1% at 34,384.13 points as of 10:17 a.m. ET.

U.S. and Israeli strikes, followed by Iranian retaliation, have sent shockwaves across global markets as investors worry that a drawn-out regional war could push energy costs higher and disrupt business in the Gulf region.

TSX's energy sub-index .SPTTEN jumped 3.1% after the conflict disrupted shipping in the crucial Strait of Hormuz and sent oil prices soaring.

U.S. Defense Secretary Pete Hegseth on Monday declined to give a timeline for the U.S.-Israeli assault on Iran, saying it was up to President Donald Trump to decide the length of the campaign.

Meanwhile, safe-haven demand lifted gold prices, though silver dropped more than 3% and copper weakened. TSX's materials index .GSPTTMT, which includes mining stocks, edged 0.4% lower.

Healthcare stocks .GSPTTHC led sectoral declines, falling 1.5%, while financials .SPTTFS, weighted heaviest on the index, traded 0.8% lower.

Communication services .GSPTTTS rose 0.4%, while industrials .GSPTTIN added 0.2%.

Some analysts remain cautiously optimistic despite the conflict dampening market sentiment.

"Markets could settle down quite rapidly unless something worse than anticipated happens," said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.

On the macroeconomic front, Canada's manufacturing sector grew for a second straight month in February, data showed on Monday.

India and Canada also agreed on a $1.9 billion deal under which Canada's Cameco CCO.TO will supply uranium to the South Asian country.