By Fergal Smith

TORONTO, March 29 (Reuters) - Canada's main stock index rose on Tuesday to a record high, led by gains for technology shares as signs of progress in Russia-Ukraine peace talks boosted sentiment.

The Toronto Stock Exchange's S&P/TSX composite index ended up 109.39 points, or 0.5%, at 22,087.22, eclipsing last Tuesday's peak of 22,074.35.

U.S.
stocks also moved higher as Russia pledged to scale back military operations around Kyiv and in northern Ukraine.

"We are in this period of uncertainty where headlines are going to drive risk behavior," said Mike Archibald, a portfolio manager at AGF Investments.

"You have technology leading the way. ... A lot of that is coming from Shopify."

E-commerce company Shopify Inc, which has one of the largest weightings on the TSX, rose 5.8%.

The technology group gained 3% and consumer discretionary ended 2.5% higher.

"Tightening (financial) conditions are going to happen here over the next several months and quarters and we'll have to see what kind of impact that has on the broader consumer," Archibald said.

As Canada's inflation outlook worsens, investors are betting the country's central bank will begin hiking its key interest rate in half-percentage-point increments, FLo Twitter with the first of the rarely used upsized moves possibly coming as soon as next month.

Flashing a warning for the economy, the widely tracked 2-year/10-year part of the U.S.

Treasury curve inverted for the first time since September 2019.

Canada's federal government will present its fiscal 2022-23 budget on April 7, which will be focused on growing the economy while making life more affordable for Canadians, Finance Minister Chrystia Freeland said.
(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Jonathan Oatis)