(Updates prices and details throughout)

* TSX up 0.7%

* Miners lead gains

* US-Iran memorandum could be signed as soon as Sunday

By Tharuniyaa Lakshmi

June 12 (Reuters) - Canada's benchmark stock index rose on

Friday as global risk sentiment improved on hopes of an imminent

Middle East deal, with a source telling Reuters that a U.S.-Iran

memorandum could be signed as early as Sunday.

At 10:21 a.m. ET, the Toronto Stock Exchange's S&P/TSX

composite index was down 0.7% at 34,926.25 points.

* The source said the language in the memorandum was still

being finalized, and Iran was sticking to its position that the

deal must also end fighting in Lebanon, where Israel has been

battling against Iran-backed Hezbollah militia.

* "I'd say right now there is optimism this will be a

lasting peace," said Shiraz Ahmed, founder at Sartorial Wealth.

He added that investors, however, were skeptical since they've

heard the same story for two-three months.

* "There will likely be a bit of a knee-jerk reaction if we

do have a lasting peace."

* The materials group, which includes stocks of

metal miners, was up 2.1%, leading gains on the TSX, with

Montage Gold ( MAUTF ), Taseko Mines ( TGB ) and Ivanhoe Mines ( IVPAF )

up between 5.1% and 9.7%.

* Seven of the 10 TSX sectors were in the green with the

financials sub-index also supporting gains, up 0.7%.

* Meanwhile, the technology sub-index fell 1.2%,

capping the upside, with MDA Space ( MDA ) leading losses, down

6.5% ahead of Elon Musk's SpaceX's Nasdaq debut, expected to be

the largest public listing in history.

* The Canadian benchmark stock index was on track for

marginal weekly gains, supported by advances on optimism over

de-escalation in the Middle East.