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Laurentian Bank slumps after loss in Q2

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Canadian economy misses first-quarter growth forecast

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US inflation rises in line with expectations in April

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TSX up 0.1%

(Updated at 10:12 a.m. ET)

By Khushi Singh

May 31 (Reuters) - Canada's main stock index edged up on

Friday, as slower-than-expected economic growth in the first

quarter reinforced hopes of a June rate cut from the Bank of

Canada, while in-line U.S. inflation reading also boosted

stocks.

At 10:12 a.m. ET (14:12 GMT), the Toronto Stock Exchange's

S&P/TSX composite index was up 28.15 points, or 0.13%,

at 22,099.86.

The domestic economy missing growth forecast has prompted

financial markets to raise the probability of a 25 basis point

interest rate cut next week to nearly 81%, up from 66%

previously.

"The downside surprise in Canada's Q1 GDP growth likely

removes the last potential barrier preventing the BoC from

easing off the monetary policy brakes with an interest rate cut

next week," said Nathan Janzen, assistant chief economist at

Royal Bank of Canada.

Meanwhile, the much-awaited U.S. Personal Consumption

Expenditures Price Index rose 0.3% in April, in line with

forecasts according to a Reuters poll.

Wall Street's main indexes also rose on Friday after the

inflation data.

Traders increased bets on September rate cuts by the U.S.

Federal Reserve to more than 52% from 49% before the data.

More than half of the sectors in the Toronto market climbed,

with the capped communication services index leading

gains with a 0.7% rise.

The energy sector advanced 0.5%, tracking an

uptick in crude prices after renewed hopes of U.S. interest rate

cuts, with focus now shifting on Sunday's OPEC+ meeting that

will determine the state of supply into next year.

The S&P/TSX index looked set for its second

consecutive weekly decline, but was on track to log gains for

the month.

BRP Inc ( DOOO ) shares fell 0.9% after the powersports

vehicles and marine products company lowered its annual revenue

forecast amid profit headwinds and high interest rates.

Laurentian Bank of Canada ( LRCDF ) reported a loss for the

second quarter, as the lender recorded impairment and

restructuring charges of $144.4 million, taking its shares down

by 4.7%.