April 21 (Reuters) - Canada's main stock index posted its biggest daily decline in a month on Tuesday as investors priced back in some uncertainty related to the war in the Middle East, with mining shares among the biggest decliners.
The Toronto Stock Exchange's S&P/TSX Composite Index ended down 551.73 points, or 1.6%, at 33,808.30, marking its largest decline since March 20. On Monday, the index posted its highest closing level in seven weeks.
"You had all the geopolitical discount and more come out of markets and now it's coming back in," said Joseph Abramson, co-chief investment officer at Northland Wealth Management.
Iran said it had still yet to decide whether to attend last-ditch peace talks with the U.S.
The price of oil settled 2.8% higher at $92.13 a barrel. Some investors have worried that the boost to inflation from the recent oil price shock will lead to tighter monetary policy globally.
Data on Monday showed that Canada's annual inflation rate rose to 2.4% in March, from 1.8% in February, but the increase was less than economists had expected, supporting bets the Bank of Canada would leave its benchmark interest rate on hold at 2.25% next week.
"Beyond some near-term movements, I think the intermediate-term trend is up," Abramson said. "Interest rates should be under control. The global economy should accelerate and the level of geopolitical risk and oil prices should decline."
The materials sector, which includes metal mining shares, declined 5.4%, with shares of NovaGold Resources down 13.3%. The price of gold fell 2.6%, pressured by a stronger U.S. dollar and rising U.S. bond yields.
Technology shares lost 1.2% and heavily weighted financials ended 0.9% lower.
Just two of the 10 major sectors ended higher, including energy, which added 1.9%.
(Reporting by Fergal Smith in Toronto and Tharuniyaa Lakshmi in Bengaluru; Editing by Sahal Muhammed and Paul Simao)
By Fergal Smith
