June 16 (Reuters) - Canada's main stock index hit a new all-time high on Monday, led by gains in information technology stocks, with investors shaking off concerns around escalating Middle East tensions and instead focusing on the Group of Seven summit.
The S&P/TSX composite index (.GSPTSE), was up 0.6% at 26,670.69 points. The commodity-heavy benchmark index fell 0.4% on Friday after a record setting run last week, buoyed by rising commodity prices, lower-than-expected U.S. inflation data and optimism around the U.S.-China trade deal.
Focus is on the G7 meeting in Canada, where a draft statement said seven countries' leaders will work to safeguard market stability, including energy markets.
The discussions are also expected to center on advancing trade deals, with investors closely watching prospects of Canada moving closer to a trade agreement with the U.S.
Meanwhile, geopolitical tensions continued to dominate headlines as the conflict between Israel and Iran showed no signs of cooling, but oil prices edged lower after a 7% surge on Friday.
"Investors are starting to price in that the conflict in the Middle East will be contained," said Ian Chong, portfolio manager at First Avenue Investment Counsel.
This week's Fed monetary policy decision presents the next major challenge for markets. While the U.S. central bank is widely expected to keep interest rates unchanged on Wednesday, investors will watch for hints about potential rate cuts in the coming months.
"Fed will probably be on hold, especially with the Middle Eastern tension potentially driving oil prices higher, which is inflationary and I don't think the rhetoric will necessarily change coming out of the Fed," Chong added.
On TSX, information and technology sector (.SPTTTK), was the top performer, up 1.4%, as the shares rebounded from Friday's sharp losses.
Consumer discretionary (.GSPTTCD), and the heavy-weight financials (.SPTTFS), also gained ground, advancing over 1% each.
On the downside, the energy sector (.SPTTEN), fell the most, down 1.3%, tracking oil prices.
Metal mining (.GSPTTMT), shares were also trading 0.5% lower as gold prices also slipped after hitting nearly an eight-week high.
Reporting by Ragini Mathur in Bengaluru; Editing by Leroy Leo
