CANADA STOCKS-TSX inches higher as Carney-Trump communications feed investor optimism

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TSX ends up 0.1% at 26,342.29

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Trade deficit hits an all-time high in April

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Energy rises 0.5% as oil settles 0.8% higher

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Descartes Systems Group tumbles 12.1%

(Updates with closing prices)

By Fergal Smith

June 5 (Reuters) - Canada's main stock index edgedhigher on Thursday as higher oil prices boosted energy sharesand investors assessed prospects of Canada reaching a trade dealwith the United States.

The Toronto Stock Exchange's S&P/TSX composite indexended up 13.29 points, or 0.1%, at 26,342.29, stayingwithin reach of the record closing high it posted on Tuesday.

Canadian Prime Minister Mark Carney and U.S. PresidentDonald Trump are in direct communication as part of Ottawa's bidto persuade Washington to lift tariffs, Industry MinisterMelanie Joly said.

"We're still cautiously optimistic that the TSX finishes at27,000 for the year," said Jay Bala, co-founder and seniorportfolio manager at AIP Asset Management.

"I do think that Mark Carney is going to have a betterrelationship with the Donald Trumps of the world and I thinkhe'll get a (trade) deal done ... it makes sense for bothcountries to get a deal done."

Canada is a major destination for U.S. goods, while it sends75% of its exports south of the border. U.S. tariffs hurt demandfor Canadian goods in April, which contributed to the Canadiantrade deficit widening to an all-time high of C$7.1 billion($5.2 billion).

The energy sector rose 0.5% as the price of oilsettled 0.8% higher at $63.37 a barrel on optimism aboutU.S.-China trade talks.

The materials group, which includes metal mining shares, wasup 0.4% as copper prices climbed.

Technology was a drag, falling 1.1%, with shares ofDescartes Systems Group Inc down 12.1% after theapplication software company's first-quarter results missedestimates.(Reporting by Fergal Smith in Toronto and Sanchayaita Roy inBengaluru; Editing by Shreya Biswas, Vijay Kishore and NiaWilliams)