DEVELOPMENTS IN QUEBEC TALKS SPARK MARKETS

DEVELOPMENTS IN QUEBEC TALKS SPARK MARKETS

Canadian Prime Minister Brian Mulroney Thursday invited the premiers of the country's 10 provinces to a working dinner Sunday night to seek an end to a prolonged constitutional conflict.

He warned that failure to ratify the so-called Meech Lake accord would send ''a dangeroussignal to the international community" about political stability in Canada.If the working dinner reveals "sufficient political will" to resolve the impasse, Mr. Mulroney said, a full-fledged conference would begin Monday.

The prime minister stressed that "what is at dispute is extremely modest when compared to what is at stake - what is at stake is Canada."

Reports of progress on Senate reform and the future status of Quebec in one-on-one discussions in recent days between Mr. Mulroney and the provincial leaders provoked a rebound on financial markets.

The more upbeat tone on the currency, stock and bond markets has triggered a decline in the Bank of Canada prime rate.

After closing Tuesday at 84.73 U.S. cents, the Canadian dollar climbed to 85 cents Wednesday.

On Thursday, the Canadian currency was trading above 85 U.S. cents for the first time since former Environment Minister Lucien Bouchard, a noted Quebec nationalist, resigned from the federal cabinet last week and declared that Quebec's only path lay in sovereignty-association.

Since Mr. Bouchard resigned, the Bank of Canada has been intervening heavily to prop up the Canadian dollar against foreign speculation that the country might break up.