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TSX ends up 2% at 27,570.08

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Posts biggest gain since April 11

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Eclipses last Tuesday's record closing high

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Materials sector jumps 5.6%

(Updates at market close)

By Twesha Dikshit and Fergal Smith

TORONTO, Aug 5 (Reuters) - Canada's main stock index

rose on Tuesday to a record high, with the materials and

technology sectors leading broad-based gains as optimism rose

that the U.S. Federal Reserve would cut interest rates in

September.

The S&P/TSX composite index ended up 549.65 points, or

2%, at 27,570.08, after three straight days of declines. It was

the biggest gain since April 11 and eclipsed the record closing

high that was posted last Tuesday.

The index was playing catch-up with Wall Street after a

Canadian market holiday on Monday.

Investors see a roughly 95% chance the Fed will ease next

month after the release of downbeat U.S. jobs data on Friday.

"People see (the U.S. unemployment numbers) as being the

rationale for a reduction in interest rates at the Fed, and

that's essentially positive for stock markets," said Thomas

Caldwell, chairman at Caldwell Securities.

"Earnings are coming across fairly well and so the world is

moving on, but there's this undercurrent of what will be the

longer-term damage of tariffs and this upending of world trade."

Canada's merchandise trade deficit widened in June to C$5.9

billion ($4.24 billion) as imports grew faster than exports due

to a one-time high-value oil equipment import.

Canada will provide up to C$1.2 billion ($870 million) to help

softwood lumber producers deal with U.S. countervailing and

anti-dumping duties, Prime Minister Mark Carney said.

The material sector, which includes lumber

producers as well as fertilizer companies and metal mining

shares, jumped 5.6% as the price of gold edged higher.

Technology was up 3%, with e-commerce platform

Shopify Inc ( SHOP ) adding more than 7% ahead of the release

of its quarterly earnings report on Wednesday.

All ten major sectors on the TSX posted gains, with both

industrials and heavily weighted financials adding 1.2%.