(Removes reference to CP Rail reporting quarterly results in 13th paragraph. CP has already reported) * TSX rises 29.45 points, or 0.20 percent, to 14,560.36 * Five of 10 main index sectors advance * Cameco slips after reporting quarterly results By John Tilak TORONTO, April 29 (Reuters) - Canada's main stock index advanced on Tuesday as a higher oil price drove gains in the energy sector, and as investors awaited the start of a two-day policymaking meeting of the U.S. Federal Reserve for clues on the direction of its monetary policy.
The focus will be on the U.S. central bank, which is expected to continue paring its bond buying. The Fed may also provide guidance on when it may raise interest rates.
A jump in shares of Encana Corp, after the natural gas producer announced an asset sale, further supported the market.
The Toronto market is up about 7 percent this year, and some investors were concerned stock prices may be overvalued.
"The battle of wits of whether the market is overvalued or undervalued continues to weigh heavily on investors' psychology," said Michael Newton, a director of wealth management and portfolio manager at ScotiaMcLeod, who recommends a diverse portfolio mix to counter the market volatility.
He does not expect any surprising changes to the Fed's monetary policy.
"Too much hard work has gone into orchestrating this recovery," Newton said. "They're not going to do anything to upset the market." The Toronto Stock Exchange's S&P/TSX composite index was up 29.45 points, or 0.20 percent, at 14,560.36. Five of the 10 main sectors on the index were higher.
Newton said sentiment for Canadian equities remained positive, and the recent weakness in the Canadian dollar was helping the energy sector.
Shares of energy producers are up about 17 percent since the start of the year, helping push up the broader market. The group climbed 1.7 percent on Tuesday, reflecting a 1 percent jump in the price of oil.
Suncor Energy Inc jumped 3.4 percent to C$42.76, and Canadian Natural Resources Ltd added 0.9 percent to C$45.24.
Encana gained 4 percent to C$26.07 after saying it had agreed to sell about 90,000 net acres in east Texas for about $530 million to an undisclosed buyer.
Canadian Pacific Railway Ltd shed 3.5 percent to C$164.95.
In other corporate news, Cameco Corp gave back 4.1 percent, to C$23.13, after the uranium producer reported quarterly results that missed market expectations.
(Editing by Bernadette Baum)
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