TSX edges up on US-Iran truce optimism, mining gains

May 7 (Reuters) – Canada’s benchmark index inched up on Thursday, with gains in mining stocks offsetting losses in energy, as investors assessed the prospect of a temporary truce between the United States and Iran. 

At 11:02 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 0.2% at 34,049.22 points.

The U.S. and Iran appear close to a limited, temporary agreement to halt the war, with the emerging deal expected to be a short-term memorandum rather than a comprehensive peace accord.

The wild card is whether both sides sign the agreement and the balance of probabilities is probably that they are tired of this, said First Avenue Investment Counsel’s chief investment officer Brian Madden, adding that it appears to be “the late innings of the conflict”.

On the TSX, six of 11 sectors were trading in the green, with the heavyweight mining sector leading gains, up 2.9%, on higher gold prices. The yellow metal rose as the possibility of a temporary peace deal eased worries about inflation and the likelihood of prolonged higher interest rates.[GOL/]

Miners B2Gold , Endeavour Silver and Torex Gold rose between 10.9% and 19.4% and were among the top gainers on the index after posting positive quarterly earnings.

However, gains were capped by energy stocks, with oil and gas producers Strathcona, Tourmaline and Canadian Natural Resources down 4% to 6.1% as a decline in crude oil benchmarks overshadowed positive quarterly earnings. [O/R]

The benchmark index is still about 1.5% below its March 2 peak, as lingering geopolitical uncertainty and volatility in energy and materials stocks due to the war weigh on markets. However, the index rose to a two-week high in the last session on a broader relief rally.

Nutrien fell 6% after the potash producer warned of tighter nitrogen market conditions going ahead.

(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Diti Pujara)

By Tharuniyaa Lakshmi