July 31 (Reuters) - Canada's main stock index hit a record high on Wednesday as energy shares gained after the killing of a Hamas leader ratcheted up tensions in the Middle East, while markets shifted focus to U.S. Federal Reserve's rate decision later in the day.
At 10:00 a.m. ET (1400 GMT), the S&P/TSX composite index (.GSPTSE), was up 142.51 points, or 0.62%, at 22,967.18, set to log its biggest percentage gain in eight months.
Energy shares (.SPTTEN), ose 1.8% to hit a 12-day high as oil prices gained after the escalating tensions in the Middle East countered demand concerns from China.
The sector was also set to log its best day in more than a month.
Materials shares (.GSPTTMT), boosted the benchmark index with a 1.2% rise as prices of gold and silver surged on expectations of dovish U.S. central bank, which is expected to announce its rate decision at 2 p.m. ET.
Copper prices also gained, helped by a weak dollar and hopes of a China stimulus propping up demand.
"Fireworks are likely to be few and far between in the Fed's report today, as it will not include new inflation projections and is almost unanimously expected to leave rates unchanged," said Richard Flynn, managing director at Charles Schwab UK.
Money markets expect the Fed to keep rates unchanged in Wednesday's meeting but have fully priced in a rate cut in September.
Back home, Canada's gross domestic product increased 0.2% in May, exceeding market expectations, and the economy likely expanded at a 2.2% annualized rate in the second quarter, data showed.
In corporate updates, Precision Drilling Corp (PD.TO), soared 7.8% after company reported second-quarter results, while Oceanagold Corp (OGC.TO), fell 8.4% to the bottom of TSX after results.
Cameco (CCO.TO), rose 0.4% after the Canadian uranium supplier reported an adjusted earnings per share of 14 Canadian cents in second quarter versus year-ago loss of 3 Canadian cents.
Reporting by Shubham Batra; Editing by Shreya Biswas
