CANADA STOCKS-TSX heads for second straight monthly gain amid renewed Middle East peace hopes

* TSX up 0.44%, helped by tech and materials

* U.S. and Iran have agreed to extend ceasefire, sources say

* Canada's Q1 GDP contracts in the first quarter

By Niket Nishant

May 29 (Reuters) - Canada's main stock index climbed on Friday and was on course for its second consecutive month of gains, as renewed hopes for a Middle East peace deal buoyed investor sentiment. At 11:17 a.m. ET, the Toronto Stock Exchange's S&P/TSX Composite Index was up 0.44% at 34,670.36 points. It has gained 2.08% so far this month.

* The United States and Iran on Thursday agreed to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, sources told Reuters, though the deal still needs U.S. President Donald Trump's signoff.

* The technology sector gained 3.5%, while materials rose 2.2%.

* Spot gold prices rose for a second straight session, helping shares of gold miners.

* Energy stocks fell as oil prices declined 1.9% on hopes that shipping through the Strait of Hormuz, a vital artery for global oil flows, could resume soon.

* However, gains on Friday were kept in check by GDP data that showed Canada's economy posted a surprise contraction in the first quarter, compared with the year before.

* The contraction marks the second straight quarter of annualized decline, which some economists call a technical recession.

* "Overall, this was a very weak report from most angles that shows that trade uncertainty and tariffs are continuing to hold back growth, while consumers have little ammunition left for spending ahead," said Katherine Judge, senior economist at CIBC Capital Markets.

* On Thursday, the Bank of Canada said the domestic financial system was in good shape, but vulnerabilities were growing. (Reporting by Niket Nishant in Bengaluru; Editing by Jonathan Ananda)