July 28 (Reuters) - Canada's commodity-heavy main stock index scaled back from its record high on Monday, pressured by mining shares, while investors assessed a trade deal between the U.S. and the European Union.
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE), was down 0.5% at 27,356.44 points.
The U.S. struck a framework trade agreement with the EU on Sunday, imposing a 15% tariff on most EU goods and requiring the bloc to invest around $600 billion in the U.S.
Other countries are also looking to finalize trade deals before the August 1 tariff deadline. But U.S. President Donald Trump said on Friday the country may not reach a trade agreement with Canada.
"For whatever reason, the U.S. does not feel Canada is important enough to get a deal done, at least with any urgency... and that obviously is a big problem," said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
But in general, investors are focused on artificial intelligence, chips, semiconductors and U.S.-China relations at the moment, Small said, adding that if those negotiations go well, "it is possible that the market could withstand the non-negotiations between Canada and the U.S."
Top U.S. and Chinese economic officials met in Stockholm on Monday to resume talks to resolve longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce by three months.
On TSX, mining stocks (.GSPTTMT), fell 2.4%, tracking lower gold prices.
New Gold (NGD.TO), slipped the most, down 6.6%, after the company reported second-quarter results.
The energy subindex (.SPTTEN), gained 1.2%, tracking higher oil prices.
Company-wise, First National Financial (FN.TO), said it had agreed to be acquired by private-equity firm Birch Hill Equity Partners and asset manager Brookfield Asset Management (BAM.TO), in a C$2.9 billion ($2.12 billion) deal. Its shares jumped 13.1%.
This week, investors will monitor policy decisions from the U.S. Federal Reserve and the Bank of Canada, and earnings from some "Magnificent Seven" companies.
Reporting by Sanchayaita Roy; Editing by Vijay Kishore and Shilpi Majumdar
