April 27 (Reuters) - Canada's main stock index edged lower on Monday as lack of progress in U.S.-Iran peace talks dampened risk appetite, while Canadian energy producer ARC Resources' shares jumped after Britain's Shell agreed to a $16.4 billion deal.
At 10:35 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index was down 0.2% at 33,825.82 points.
Work has not halted to bridge gaps between the U.S. and Iran, sources from mediator Pakistan said, despite failure of face-to-face diplomacy after President Donald Trump called off his envoys' trip and said Iran should call when it wants a deal.
ARC's shares rose 21.9%, hitting their highest since 2014.
The energy sector led gains with a 1.8% rise, mirroring higher oil prices as shipments through the Strait of Hormuz remained limited, keeping global oil supplies tight.[O/R]
"Right now, it's more about risk monitoring. Once earnings season passes, attention will shift back to the broader macro picture, including whether higher oil prices start to weigh on consumers," said Michael Dehal, a senior portfolio manager at Dehal Investment Partners at Raymond James.
"So far, consumers are holding up, but investors are watching for any signs of consumer cracks."
Shares of miners weighed the most on the index. B2Gold fell 7.3%, while Avino Silver and Gold Mines , Pan American Silver Corp and Kinross Gold fell between 3.3% and 2.7%, tracking lower gold and silver prices.
Meanwhile, the Bank of Canada is expected to keep rates on hold at 2.25% on Wednesday, as economists see the oil price shock from the Iran war as a short-lived move with limited impact on inflation expectations.
Money market participants are pricing in an interest-rate hike by the end of 2026, according to data compiled by LSEG.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Shreya Biswas)
By Tharuniyaa Lakshmi
